DoD tests AI models that make it easy to switch from vendors like Palantir
Investing.com - Erste Group downgraded Intuitive Surgical (NASDAQ:ISRG) from Buy to Hold on Wednesday, citing limited upside potential due to valuation concerns and margin pressure. The stock, currently trading at $511, shows a P/E ratio of 73.8x, significantly above sector averages. According to InvestingPro analysis, the company appears overvalued at current levels, despite maintaining a "GREAT" financial health score.
The research firm noted that while turnover and profit will increase in 2025 for the surgical robotics company, profit growth will be lower this year compared to previous expectations.
Erste Group attributed the reduced profit growth outlook to the introduction of tariffs on products that Intuitive Surgical primarily manufactures in Mexico.
The operating margin "will therefore come under slight pressure in the coming quarters," according to the firm’s analysis of the situation.
The downgrade was also influenced by Intuitive Surgical’s current valuation, with Erste Group pointing out that the stock’s P/E ratio is "well above the sector average," suggesting limited upside potential for the time being. This aligns with multiple InvestingPro indicators showing high valuation multiples across earnings, EBITDA, and revenue metrics.
In other recent news, Intuitive Surgical reported impressive second-quarter 2025 results, with revenue reaching $2.44 billion, marking a 21% increase year-over-year. The company’s earnings per share stood at $2.19, surpassing the consensus estimate of $1.92. The successful launch of the next-generation DV5 robotic system was highlighted by 180 system placements in the second quarter, up from 147 in the first quarter. Analysts responded positively, with Stifel reiterating a Buy rating and setting a price target of $670.00. Raymond (NSE:RYMD) James maintained an Outperform rating, citing stronger-than-expected results, while BTIG raised its price target to $571. Piper Sandler also increased its price target to $595.00, noting impressive operating margin performance. Baird followed suit, raising its target to $600.00 and highlighting the company’s strong growth across all business segments. These developments reflect a positive outlook from multiple analyst firms on Intuitive Surgical’s recent achievements.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.