Buy, hold, sell: ResMed, Origin Energy, Reece shares

Macquarie has published several new research reports this week, highlighting companies it thinks will do well and those it thinks will not.

I've selected three to have a look at today.

Let's see what the broker is saying.

ResMed Inc (ASX: RMD)

Shares in the sleep apnea device maker are down about 15% on a 12-month basis, but the team at Macquarie thinks they're in for a rerating.

ResMed on October 30 reported that first-quarter revenue was up 6% to US$1.4 billion, while earnings per share were up 23% to US$2.92.

The company also returned more than US$1 billion to shareholders through share buybacks and dividends, and reiterated its previous guidance of 5% to 7% revenue growth for the full year.

Macquarie said it was a "strong" result, with net profit coming in 9% ahead of expectations.

It added that the growth was broad-based and benefited from new product launches.

ResMed, Macquarie said, continued to strengthen its competitive moat through higher patient adherence and digital engagement.

The broker has a price target of $47.50 on ResMed shares compared to $33.31 at the time of writing, and an outperform recommendation.

Origin Energy Ltd (ASX: ORG)

Origin shares are static over this time last year, and according to Macquarie, that's about where they will stay.

The company released its quarterly report on 30 October, and while production from the Australia Pacific LNG (APLNG) plant fell slightly, revenue from that division rose 32% due to higher gas prices.

In the domestic market, electricity sales were up 3% year on year, while gas sales fell 7%.

Macquarie said the APLNG result was a strong revenue outcome, but the domestic electricity and gas markets remained soft.

Macquarie lifted its price target for Origin from $11.10 to $11.40, but maintains a neutral rating on the stock, given the price of $12.23 at the time of writing.

Macquarie is tipping Origin to pay a dividend yield of 5.2% out to FY29.

Factoring in the dividend yield, Macquarie predicts a total shareholder return over 12 months of minus 1.7%.

Reece Ltd (ASX: REH)

Reece shares are up more than 50% on a 12-month basis, and Macquarie said the company has been trading well.

But it warned that forward indicators in the local housing market were weak and there was no clear catalyst for an upturn in the United States.

Reece Chief Executive Officer Peter Wilson, in a trading update released on 30 October, said the company expected a strong first half for Australia and New Zealand, and continuing challenges in the US.

Macquarie has an underweight rating on Reece and a price target of $15.40 compared with $18.07 at the time of writing.

The post Buy, hold, sell: ResMed, Origin Energy, Reece shares appeared first on The Motley Fool Australia.

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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