The ResMed Inc. (ASX: RMD) share price is trading lower on Thursday.
In afternoon trade, the sleep treatment focused medical device company's shares are down 1.5% to $33.78.
Why is the ResMed share price falling?
The weakness in the ResMed share price could have been driven by the release of an update from one of one of the company's rivals.
Overnight, health technology giant Philips revealed that its third-quarter financial performance was impacted by continued supply chain challenges that were more significant than anticipated.
It also warned that the remainder of the second half may not be as strong as expected because of these challenges. The company said:
Looking ahead, Philips still expects a better second half of the year, compared to the first half of 2022. However, the company sees prolonged supply chain disruptions and a worsening macro-environment. Consequently, Philips now expects a mid-single-digit comparable sales decline for the fourth quarter of 2022 with a high-single-to-double-digit adjusted EBITA margin range.
Is this a buying opportunity?
According to a note out of Goldman Sachs, its analysts remain bullish on the ResMed share price.
This morning the broker has retained its buy rating and $36.80 price target on the company's shares.
Based on where its shares are trading today, this implies potential upside of 9% for investors over the next 12 months. It commented:
We are Buy-rated on RMD. Our 12-month target price of A$36.80 is unchanged and remains based 85% on our NTM EV/EBITDA valuation of A$35.00 (multiple of 27.3x based on weighted average of peers, sector and DCF target multiple) and 15% on our M&A valuation of A$46.90 (multiple of 36.7x).
Goldman also remains neutral on fellow medical device company Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), with a price target of $17.90.
