From Standard & Poor's Equity Research
Wachovia Securities downgraded its investment recommendation on shares of Resmed (RMD) to market perform from outperform.
Analyst Michael Matson says further deceleration in the company's revenue growth over the next three quarters could result in estimate misses and restrain the share price. Matson says he models revenue growth rates of 23% for the first quarter, 23% for the second, 20% for the third, respectively, against year ago's 45%, 41%, 50% growth rates. He cites the end of inorganic growth contribution from the Saime acquisition, tougher competition from Respironics (RESP) in flow generators and, to a lesser extent, masks, as well as the risk that the now-ended German strikes hurt sales. Matson believes investors interested in sleep apnea space would do better with Respironics.