UPDATE: Morgan Stanley Initiates Coverage On Intuitive Surgical
In a report released Wednesday, Morgan Stanley analyst David Lewis initiated coverage on Intuitive Surgical (NASDAQ: ISRG) with a base case of $370. Morgan Stanley previously had an Overweight rating.
Analysts at Morgan Stanley believe Intuitive Surgical's improved procedures will result in a short run investor relief rally, but they don't see proof of inflection. Lewis claimed Intuitive Surgical's ability to manage stock-comp is out of range compared to its peers.
Morgan Stanley is prevented from calling an inflection due to system utilization rates continuing to be in negative territory year-over-year. This indicates underlying demand for new systems, comps uncertainty from its recovery to decline and net system payments decline quarter-over-quarter.
Morgan Stanley's base case of $370 per share was given by a 25x multiple from its 2015 estimate of $14.78.
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