Bell Potter analyst, John Hester, has amended his recommendation of Resmed (RMD) from a BUY to HOLD

Bell Potter analyst, John Hester, has amended his recommendation of Resmed (RMD) from a BUY to HOLD. The 1.8% earnings downgrade in FY14 is a consequence of the lower than expected gross margin result of 63.3% which was 70bps below our forecast and 140bps below the previous sequential quarter. In our view, even though volumes may continue to grow strongly the pricing pressure is likely to be ongoing. New products no longer attract the pricing premium they once did and other pricing pressures are ongoing and this follows a step adjustment in pricing over the last 90 days. Considering the modest forecast EPS growth in FY15 and following the share price bounce that resulted from this latest earnings announcement, we have amended our recommendation from BUY to HOLD.