S&P 500 may face selling pressure as systematic funds reach full exposure
Wednesday, RBC Capital Markets adjusted its price target for Intuitive Surgical (NASDAQ:ISRG) shares, reducing it from $630.00 to $605.00, while maintaining an Outperform rating on the stock. Currently trading at $507.50, the company commands a market capitalization of $180.5 billion. The adjustment followed Intuitive Surgical’s first-quarter earnings report, which exceeded expectations and included a raised 2025 procedure volume guidance, a critical indicator for system placements.
The company’s stock experienced a drop of 6.5% in after-hours trading due to management’s comments on the impact of tariffs and capital budgets. However, it later regained most of its losses, closing at just 0.8% below its previous close. According to InvestingPro, the company maintains excellent financial health with a "GREAT" overall score, supported by a strong current ratio of 4.07 and minimal debt. RBC Capital’s analysis suggests that the tariff-related risks are somewhat manageable, forecasting a lower mid-single-digit impact on earnings per share (EPS).
Intuitive Surgical demonstrated robust growth in the first quarter, with a 17% year-over-year increase in procedure volume and capital placements, matching its impressive revenue growth of 17.24% over the last twelve months. The company also provided a positive outlook for procedure growth, projecting a 15-17% year-over-year increase by 2025. This growth is anticipated to be further supported by the scheduled mid-2025 launch of the full dV5 system, which is expected to serve as a significant catalyst for the company, given the strength of current capital budgets.Discover more insights about Intuitive Surgical with InvestingPro, which offers 13 additional ProTips and a comprehensive Pro Research Report covering what really matters for informed investment decisions.
RBC Capital has adjusted its estimates and price target for Intuitive Surgical to account for the anticipated effects of tariffs. Despite these adjustments, the firm has reiterated its positive stance on the stock, underlining the company’s strong momentum and future growth prospects, with analyst targets ranging from $350 to $700.
In other recent news, Intuitive Surgical reported first-quarter earnings that exceeded expectations for both revenue and earnings per share, largely due to increased procedural volumes. This strong performance prompted the company to revise its full-year 2025 procedure growth guidance upward to 15-17%, reflecting continued momentum. Despite the positive earnings, several analysts have adjusted their price targets for Intuitive Surgical. Truist Securities lowered their target to $590, Piper Sandler to $575, Raymond (NSE:RYMD) James to $592, Bernstein to $675, and Leerink Partners to $539, while all maintained positive ratings on the stock.
The adjustments in price targets are primarily attributed to anticipated tariff impacts, which are expected to affect gross margins. Intuitive Surgical has revised its gross margin guidance for fiscal year 2025 to 65-66.5%, down from the previous 67-68%, due to these tariffs. Analysts from firms such as Raymond James and Bernstein remain optimistic about the company’s long-term growth potential, citing strong procedure growth and a robust capital position. Additionally, the mid-year launch of the dV5 system is seen as a key driver for future growth. Despite challenges, the consensus among analysts is that Intuitive Surgical remains a strong player in the medtech industry.
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