Intuitive Surgical shares rise on Truist’s Buy rating By Investing.com

On Friday, Truist Securities adjusted its outlook on Intuitive Surgical (NASDAQ:), a leader in robotic-assisted surgery, by increasing the firm’s price target on the company’s shares from $515 to $520 while maintaining a Buy rating.

The revision follows Intuitive Surgical’s second-quarter revenue and earnings per share (EPS) that surpassed expectations, driven by a significant uptick in procedures and system sales, including the addition of 70 new da Vinci 5 (D5) systems.

The company’s performance indicates a trajectory to surpass Truist’s previous forecast of 60 D5 placements for the year 2024. The success comes even as the D5 system is still in its “limited launch” phase.

The improved revenue and margins have contributed to an acceleration in revenue and EPS growth for Intuitive Surgical, prompting the analyst to revise estimates upward.

Truist Securities highlights Intuitive Surgical’s potential to maintain a mid-to-high teens revenue and EPS compound annual growth rate (CAGR).

The firm’s optimism is rooted in the company’s ability to continuously innovate and dominate in the expanding market of robotic surgery. The analyst’s commentary underscores the importance of staying ahead of the D5 product cycle from Intuitive Surgical, which is seen as a critical factor in sustaining the company’s significant market lead.

The raised price target to $520 reflects confidence in Intuitive Surgical’s continued growth and its position as a preferred large-cap stock within the medical technology sector. The company’s ability to exceed expectations with the D5 system, even during its limited launch phase, suggests a strong outlook for its future performance and market presence.

In other recent news, Intuitive Surgical has been in the spotlight following impressive second-quarter results. The company’s revenue and earnings per share (EPS) exceeded expectations, driven by a 17% increase in procedures and the placement of 70 da Vinci surgical systems.

Analyst firms Piper Sandler, Baird, RBC Capital, and BTIG have responded positively to these developments, raising their price targets for Intuitive Surgical to $495, $503, $475, and $469 respectively, while maintaining their favorable ratings on the stock.

Evercore ISI, however, reduced its price target to $410, but retained an ‘In Line’ rating. Meanwhile, Truist Securities raised its price target to $515, maintaining a Buy rating on the stock. Amid these developments, the U.S. Food and Drug Administration approved a labeling revision for Intuitive’s da Vinci X and Xi surgical systems, indicating comparable survival rates for patients undergoing robotic-assisted radical prostatectomy to those of traditional open surgery.

These recent developments come as Intuitive Surgical also updated its full-year 2024 guidance, raising the midpoint of its worldwide procedure growth outlook to a range of 15.5-17.0%, up from the previous forecast of 14.0-17.0%. Additionally, the company improved its gross margin projections and reduced its operating expense targets.

InvestingPro Insights

Following Truist Securities’ optimistic outlook on Intuitive Surgical, a glimpse into the company’s financial health through InvestingPro data reveals additional insights. Intuitive Surgical boasts a robust market capitalization of $147.61 billion and maintains a high P/E ratio of 73.62, indicating that investors may expect high future earnings growth. The company’s revenue growth is also notable, with a 13.81% increase over the last twelve months as of Q1 2024. This growth trajectory aligns with the analyst’s projections of a mid-to-high teens revenue and EPS CAGR.

InvestingPro Tips further shed light on the company’s financial position. Intuitive Surgical’s liquid assets surpass its short-term obligations, which underscores its financial stability. Additionally, the stock generally trades with low price volatility, providing a more predictable investment environment. For investors seeking more comprehensive analysis, there are over 10 additional InvestingPro Tips available on Intuitive Surgical, which can be found at https://www.investing.com/pro/ISRG. Moreover, to enhance investment strategies, users can take advantage of a special offer using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

The InvestingPro data and tips complement the positive outlook provided by Truist Securities, offering potential investors a multifaceted view of Intuitive Surgical’s promising future in the medical technology sector.

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