KeyBanc Capital Markets increased its 12-month price target for ResMed (NYSE:RMD) to $302.00 from $299.00 and retained an Overweight recommendation, citing the companys latest quarterly performance as supportive of its investment thesis.
The analyst update follows ResMeds fiscal second-quarter 2026 results, which KeyBanc characterized as "largely positive and supportive." The firm specifically pointed to revenue that outpaced expectations, driven by strength in the Masks & Accessories and Devices segments, while the company's Software as a Service - SAAS - business was noted as a modest offset to the outperformance.
KeyBanc also highlighted ResMeds upward revision to the low end of its gross margin guidance, taking that move as a sign of improving profitability prospects for the remainder of fiscal 2026. ResMeds reported gross profit margin stands at 60.69%.
Beyond operating results, the research note underscored ResMeds strong financial position at the end of the quarter and said the balance-sheet strength should give management continued flexibility in capital allocation decisions. Supporting data from InvestingPro cited a current ratio of 2.89 and described the companys debt profile as moderate; InvestingPro also assigns a "GREAT" rating to ResMeds financial health.
From a reported-results standpoint, ResMed posted earnings per share of $2.81 for fiscal Q2 2026, above the consensus of $2.73. Revenue for the quarter came in at $1.4 billion, matching expectations. On an organic basis, the company recorded 8% revenue growth in the period, up from 7% in the prior quarter and ending a three-quarter run of slowing growth.
Market reaction was muted: the stock slipped slightly in aftermarket trading following the release. Among other sell-side responses, Needham maintained a Hold rating after the results.
What KeyBanc emphasized
- Revenue beat led by Masks & Accessories and Devices segments.
- Gross margin guidance tightened upward at the low end, pointing to better near-term profitability.
- Balance-sheet metrics support flexibility in capital allocation.
Interpreting the data
KeyBancs modest target increase to $302 from $299 keeps ResMed within a valuation context that InvestingPro indicates is slightly below its Fair Value, with a PEG ratio of 0.88. That PEG suggests valuation appears attractive relative to growth expectations embedded in the market.
Analyst divergence and market reaction
While KeyBancs view is constructive enough to justify an Overweight rating and a higher target, other firms remain more cautious; Needhams Hold reiteration signals that some analysts may be weighing offsets such as the SAAS segments drag or valuation considerations. The slight aftermarket dip suggests short-term investor sensitivity despite the beat on EPS.
Bottom line
KeyBancs update frames ResMeds Q2 results as a reaffirmation of core strengths: durable margins, revenue growth across key device and accessory lines, and a solid balance sheet that can support capital allocation choices. Near-term uncertainties noted by the market include the SAAS business contribution and differing analyst perspectives that could keep trading volatile.