No Reason To Believe Intuitive Surgical's Momentum Will Stop Now

Barclays analyst Matthew Taylor reiterated an Overweight rating on Intuitive Surgical, Inc. ISRG with a price target upped to $1,000.

Although Intuitive slightly missed the Street’s EPS estimate for the second quarter, it easily beat on sales. Taylor noted “robust” procedure growth, new box placement acceleration and gains from the company’s new X system as highlights from the earnings call.

Investors didn’t seem to agree though, with the stock quickly dropping $30, about 2.5 percent, on Friday morning.

‘No Reason For Momentum To Slow’

The company raised guidance for 2017, although it expects procedure growth to pull back slightly due to a lost operating day in Q3 and new quotas from China and Japan.

The quotas were of particular concern for investors, but Taylor believes Intuitive could benefit from new quotas in the future.

He also highlighted the company’s history of conservative guidance figures and that procedure comps tend to ease in Q3 each year.

There is “no evidence of weaker capital trends that some investors feared,” said Taylor.

The analyst’s only concern is a possible too-high valuation, but is confident the company’s outperformance will drive EPS growth.

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Posted In: Analyst ColorBiotechEarningsLong IdeasNewsGuidanceHealth CarePrice TargetReiterationAnalyst RatingsTechTrading IdeasGeneralBarclaysMatthew Taylor
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