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    How Investors Are Reacting To ResMed (RMD) Downgrade Amid FY27 Cost and Supply Pressures

    Simply Wall St·07/18/2026 04:35:47
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    • RBC Capital recently downgraded ResMed to Sector Perform from Outperform, pointing to FY27 pressures from Astral ventilator replacements, higher input costs, and supply constraints on key components.
    • The downgrade highlights how operational issues in a single product line can ripple through device sales, cost structure, and overall business planning for the coming years.
    • Next, we’ll examine how expected FY27 cost pressures and supply bottlenecks may influence ResMed’s previously optimistic investment narrative.

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    ResMed Investment Narrative Recap

    To own ResMed, you need to believe its core sleep and respiratory therapy franchise, plus its growing digital ecosystem, can keep generating attractive returns despite reimbursement, competition, and cost pressures. The RBC downgrade puts a spotlight on FY27 headwinds from Astral replacements and component constraints, but it does not yet overturn the central near term catalyst around device and mask demand, or the key risk that margin pressure could build faster than expected if cost inflation persists.

    The recent Q3 2026 result, with US$1,431.41 million in sales and US$398.73 million in net income, is the most relevant backdrop for this downgrade. It shows ResMed entering this period of anticipated FY27 pressure from a position of solid profitability and continued buybacks, rather than distress. How effectively management can protect margins from higher input costs and supply bottlenecks will matter at least as much as topline growth for the near term story.

    Yet behind the consensus view, there is a risk that investors may be underestimating how persistent component cost inflation could be and what it might mean for...

    Read the full narrative on ResMed (it's free!)

    ResMed's narrative projects $6.8 billion revenue and $1.9 billion earnings by 2029. This requires 7.2% yearly revenue growth and an earnings increase of about $0.4 billion from $1.5 billion.

    Uncover how ResMed's forecasts yield a $260.60 fair value, a 31% upside to its current price.

    Exploring Other Perspectives

    RMD 1-Year Stock Price Chart
    RMD 1-Year Stock Price Chart

    While consensus focuses on steady growth, the most optimistic analysts were penciling in about US$6.8 billion of revenue and US$1.8 billion of earnings by 2029, which now sit untested against fresh concerns about long term cost inflation and potential margin squeeze.

    Explore 6 other fair value estimates on ResMed - why the stock might be worth as much as 43% more than the current price!

    The Verdict Is Yours

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

    • A great starting point for your ResMed research is our analysis highlighting 4 key rewards that could impact your investment decision.
    • Our free ResMed research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ResMed's overall financial health at a glance.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.