UBS has downgraded Resmed Inc (RMD) to Neutral from Buy following completion of a 3 year re-bidding of Round 1 of the US Medicare pricing which has seen a bounce in price expectations. UBS re-bid price estimates are about 11% higher. UBS notes the nine major cities that took part in the competitive bidding process three years ago affect about 1% of ResMed revenue. For UBS the direction of the price signal is most important and indicates a more rational stance on pricing. As such, the broker has changed its valuation assumptions. However, with the recent rally in the stock price, the rating moves down to Neutral from Buy. The price target is raised to US$53.01 (A$5.64) from US$50.50 (A$5.52). At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.90.