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Intuitive Surgical Has 'Ample Runway' To Grow Despite Medtronic's Robotic Surgery Push, Canaccord Says

Intuitive Surgical Has 'Ample Runway' To Grow Despite Medtronic's Robotic Surgery Push, Canaccord Says

Canaccord Genuity said Intuitive Surgical, Inc. (NASDAQ: ISRG) has ample runway for growth despite Medtronic PLC (NYSE: MDT)'s push on robotic surgery.

The brokerage reiterated its Buy rating and $700 price target on the ISRG shares following Medtronic's investor and analyst meeting where Medtronic provided details regarding its surgical robotic system for the first time.

"Given palpable investor concern about the prospects of MDT entering the robotic surgery fray, details given by MDT about its robotic surgery platform portended neutral to ISRG at worst, in our view," analyst Jason Mills wrote in a note.

Based on the details, including timing (seemingly at least 18-24 months away), the analyst noted that ISRG should enjoy a clear field in the surgical robotics market over the near/medium term.Medtronic would initially be focusing on market development rather than competitive share.

Mills said though Medtronic will eventually target procedural markets in which ISRG does business (colorectal, thoracic), he believes ISRG has plenty of growth opportunities in the near/medium term.

The analyst highlighted that ISRG's growth opportunities should come from domestic growth in general surgery procedures and international expansion of dvP and dvH, not to mention incremental opportunities portended by new products (i.e. SP).

For 2016, Mills expects EPS of $20.27 on revenue of $2.608 billion, while Street expects earnings of $20.62 a share on revenue of $2.62 billion.

At the time of writing, shares of Intuitive Surgical gained 0.11 percent to $636.29.

Posted-In: EPS Jason Mills MedtronicAnalyst Color News Price Target Reiteration Analyst Ratings


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