Sleep device maker ResMed rose Tuesday after the stock notched an upgrade and price target increase on Wall Street.

RBC Capital analysts boosted the stock's rating to Outperform from Sector Perform on Tuesday, while lifting the price target to $262 from $244, citing growing demand for sleep apnea devices.

The firm said that ResMed, a top provider of devices for respiratory care and obstructive sleep apnea (OSA), is poised to gain market share as global awareness of the condition grows.

ResMed shares rose 3.3% to $230.39 on Tuesday.

Rising demand for sleep apnea devices has continued to benefit ResMed. The company's sleep device sales grew 8% year over year in the Americas and 13% across international markets in its fiscal fourth quarter ended Jun. 30.

OSA is a common sleep disorder where breathing repeatedly stops and starts, affecting an estimated 83.7 million U.S. adults age 20 or older, according to the National Council on Aging.

ResMed has become increasingly attractive to investors under new chief financial officer Aaron Bloomer, the RBC team said. They highlighted the company's clearer financial guidance and substantial $1.5 billion share repurchase plan.

Setbacks for competitors have also positioned ResMed to capture more market share, the analysts wrote. Last week, the Food and Drug Administration reported a Class I recall for select respiratory and sleep apnea devices manufactured by China's BMC Medical and imported to the U.S. by React Health.

In 2021, rival Philips Respironics recalled millions of sleep devices and stopped selling them in the U.S. after discovering that sound-dampening foam inside the machines could degrade, creating a risk that users might accidentally inhale or swallow foam particles.

While analysts expect Philips to re-enter the U.S. market in fiscal 2028, they wrote that ResMed has built enough momentum to maintain annual profit growth of 7% to 9%.