ResMed is under Algo Engine buy conditions and is a current holding in our ASX top 100 model portfolio.
RMD announced 4Q20 earnings, which were better-than-expected, underpinned by robust COVID-19 ventilator demand. However, modest revenue growth is expected in the near-term, implying limited near-term growth.
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The 40x PE multiple looks too rich for the current earnings outlook. The forward dividend yield is 1%.
We suggest waiting for the next Algo buy signal to re-enter RMD on a pullback. Our new entry target is $22.
