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On Wednesday, Bernstein analysts, led by Lee Hambright, adjusted the price target on Intuitive Surgical stock (NASDAQ:ISRG) to $675 from the previous $700, while reiterating an Outperform rating on the company. This revision reflects a change in the price-to-earnings (P/E) multiple used to determine the price target, which has been lowered from 72x to 68x. According to InvestingPro data, the company currently trades at a P/E ratio of 74.57x, with analyst targets ranging from $350 to $700. The analysts’ optimistic outlook is based on several factors, including strong procedure growth, a healthy capital position, and manageable tariffs.
Intuitive Surgical has experienced a notable decline in its stock value since January, with a 22% drop from the $610 mark as of Tuesday. After-hours trading saw the stock fall below $450, marking a significant decrease in its market value. The stock, which has shown higher volatility with a beta of 1.56, currently trades at $478.74. Despite this recent downturn, Bernstein analysts remain positive about Intuitive Surgical’s prospects. InvestingPro analysis indicates the company maintains excellent financial health with an overall score of "GREAT."
The firm’s confidence in Intuitive Surgical is grounded in what they see as five transformational product cycles poised to begin impacting the company’s performance in the near future. These innovations are expected to drive growth and reinforce Intuitive Surgical’s position as a leading investment opportunity in the healthcare sector.
Hambright’s commentary highlighted the company’s strengths, stating, "Procedures strong, capital healthy, tariffs manageable. Top pick." The analyst also pointed to an increase in the company’s forward Q5-Q8 earnings per share (EPS) estimate, which has been raised to $9.91 from the previous $9.73.
The reaffirmed Outperform rating and the updated price target suggest that Bernstein’s analysts believe Intuitive Surgical has the potential to outperform despite the recent challenges in its stock price. The company’s focus on innovative healthcare solutions is seen as a key driver for long-term growth.
In other recent news, Intuitive Surgical reported strong financial results for the first quarter of 2025, with revenues reaching $2.25 billion, marking a 19% increase year-over-year, and earnings per share (EPS) of $1.81, both surpassing consensus estimates. The company sold 147 da Vinci (EPA:SGEF) 5 (dV5) systems, although system placements fell short of expectations. Despite this, the procedure growth rate was robust, particularly internationally, with a 24% increase in overseas procedures. Analysts from firms such as Leerink Partners, BTIG, Jefferies, and Evercore ISI adjusted their price targets for Intuitive Surgical, with targets ranging from $470 to $542, reflecting the company’s recent performance and the anticipated impact of tariffs on gross margins. Leerink Partners and BTIG maintained positive outlooks with Outperform and Buy ratings, respectively, while Jefferies and Evercore ISI held more neutral stances with Hold and In Line ratings. Intuitive Surgical’s updated guidance for 2025 includes a procedure growth forecast of 15-17% and gross margins expected to be between 65% and 66.5%, factoring in the impact of tariffs. The company continues to focus on the expansion of its da Vinci V platform and international growth, despite challenges such as tariff impacts and capital expenditure pressures in some international markets.
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