Wachovia Downgrades ResMed (RMD) to Market Perform

March 17, 2009 8:36 AM EDT

Wachovia downgrades ResMed Inc. (NYSE: RMD) from Outperform to Market Perform.

Wachovia analyst says, "Our downgrade is driven by the following: (1) the recession may hurt sleep market growth, (2) revenue comps start to get tougher in the June quarter, (3) reimbursement declines may hurt margins, (4) currency benefit is mostly factored into estimates now, and (5) shares have outperformed peers and the S&P 500 since 10/13/08 (RMD shares have declined by 1.3% vs. a 43.4% decline for small-cap GARP peers and a 24.9% decline for the S&P 500) and trade a substantial premium to peers (RMD trades at 18.0x our 2009 EPS estimate vs. small-cap GARP peers trading at a median 13.7x)."

ResMed Inc. is a developer, manufacturer and distributor of medical equipment for treating, diagnosing, and managing sleep-disordered breathing (SDB) and other respiratory disorders.

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• Wachovia
• Standard & Poor's

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