UPDATE 1-RESEARCH ALERT-Wachovia raises ResMed, NuVasive

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Oct 13 (Reuters) - Wachovia Capital Markets LLC upgraded medical device makers ResMed Inc (RMD.N) and NuVasive Inc (NUVA.O) to "outperform" from "market perform," citing higher revenue growth and margin expansion.

Respiratory equipment maker ResMed should benefit from additional business from Apria Healthcare Inc AHG.N, a strong balance sheet and currency impact on earnings given a greater weakening in the Australian dollar, analyst Michael Matson said in a note.

Resmed is based in U.S. and listed in Australia. Matson expects underlying revenue growth for the company to remain in the mid-teens.

The analyst expects NuVasive's organic revenue growth, which rose to over 60 percent, to continue over the next few quarters, and also sees significant legal costs for the company from the patent lawsuit against Medtronic Inc (MDT.N).

Matson said Nuvasive's sales guidance for its bone matrix product Osteocel, forecast at $15 million for 2008 and $25 million in 2009, was conservative, and that the company was much less exposed to any procedural slowdown.

Shares of ResMed closed at $33.90 Friday on the New York Stock Exchange and those of NuVasive closed at $42.61 on Nasdaq. (Reporting by Vidya L Nathan in Bangalore; Editing by Kavita Chandran)