Yesterday, shares of Intuitive Surgical (ISRG) jumped 13% after the FDA approved its latest robotic-surgery device. Today, Intuitive Surgical’s shares are rising again after the company was upgraded by JMP Securities.
JMP Securities’ J.T. Haresco explains why he upgraded Intuitive Surgical:
We are substantially raising our 2015 estimates and upgrading shares of Intuitive Surgical from Market Underperform to Market Outperform, and establishing a $700 price target after spending time sizing up the new Xi. Yesterday, Intuitive announced that the FDA approved the fourth generationda Vinci system, the Xi. We were able to spend some time with the Xi at the company’s headquarters in Sunnyvale, and believe that its introduction can overcome our key concerns: 1) the $1.8M device targeted at complex surgery will eventually replace a large percentage of the install base of ~2,000 Si models in the U.S., 2) with the existing Si fleet depreciated to approximately $700K, they are likely to find a second life in outpatient surgical centers, solving the need for better ROI in those surgical venues, 3) the Xi’s autodeployment feature will reduce setup time, again solving one of our main issues with the existing Si platform, and 4) the higher price point will raise ASPs over time.
Overall, that should boost Intuitive Surgical’s revenue growth from 0.3% to 16%, Haresco says, while earnings per share could grow by as much as 27%, after falling 10%.
Shares of Intuitive Surgical have gained 4.1% to $513.63 at 12:39 p.m.
You can read Barron’s take here.
No comments:
Post a Comment