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Analyst: Intuitive Surgical Is Moving Into Its 'Most Catalyst Rich' Cycle Ever

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Analyst: Intuitive Surgical Is Moving Into Its 'Most Catalyst Rich' Cycle Ever
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Intuitive Surgical, Inc. (NASDAQ: ISRG) reported Tuesday its first quarter results, which came in ahead of expectations and sent the stock surging to new all-time highs. Yet the company still faces its "most catalyst rich" cycle ever, according to Morgan Stanley.

The Analyst

Morgan Stanley's David Lewis maintains an Overweight rating on Intuitive Surgical with a price target lifted from $500 to $525.

The Thesis

Intuitive Surgical's results came in "materially stronger" than Lewis' already bullish expectations, the analyst said in a note. The strength seen in the quarter came in a big part from procedure growth of 15 percent from a year ago and encouraging gross system placements, which was the second strongest ever.

Lewis said investors should have confidence that Intuitive Surgical will proceed in multiple catalysts that have yet to play out. These include:

SP approval and additional filings after a "normal" process in which the FDA asked questions;

Renewal of China quota where demand for robotic surgery is "meaningful"; and

Ongoing progress in Japan where the total addressable market is more than 200,000 procedures versus 30,000 prior from prostatectomy and partial nephrectomy.

Price Action

Shares of Intuitive Surgical hit a new all-time high of $471.40 Wednesday, higher by more than 8 percent on the day.

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Image Credit: ©[2016] Intuitive Surgical, Inc. (©[2016] Intuitive Surgical, Inc.), via Wikimedia Commons

Latest Ratings for ISRG

DateFirmActionFromTo
Oct 2018Raymond JamesMaintainsOutperformOutperform
Oct 2018Canaccord GenuityUpgradesHoldBuy
Oct 2018Morgan StanleyMaintainsOverweightOverweight

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