UBS has analysed the current penetration of the US obstructive sleep apnoea (OSA) market and assessed the sustainability of new patient flow generator set-up growth.
While the broker acknowledges reaching a definitive conclusion is difficult, the base case forecast suggests the US is around 60% penetrated. Assuming flow generator volume growth of 5% over the forecast period, full saturation is reached in FY28. However, this is extended out to FY36 when using a figure for disease prevalence of 20%.
UBS reveals feedback from US sleep physicians suggests no sign of slowdown in new patient diagnosis, with obesity and ageing being the key drivers.
The broker anticipates a robust 4Q20 result and forecasts sales growth of of 15% and non-GAAP EPS of US$1.33.
Neutral rating maintained. Target is raised to US$200 from US$183.
Sector: Health Care Equipment & Services.
Current Price is $29.27. Target price not assessed.
