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Intuitive Surgical Rises on Earnings Beat, Price Target Raise

Intuitive's price target was raised to $840 from $735 at Piper Sandler after the medical-equipment company reported first-quarter results.
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Shares of Intuitive Surgical  (ISRG) - Get Intuitive Surgical Inc. Report were higher on Wednesday after the medical-equipment company's first-quarter results topped estimates and analysts at Piper Sandler increased their price target. 

Analyst Adam Maeder affirmed a neutral rating on the Sunnyvale, Calif., company while lifting the investment firm's price target to $840 a share from $735. 

"Despite some lingering COVID-19 impact in the quarter, the company posted healthy mid-teens procedure growth and a better-than-expected quarter from a robot placement perspective driven in part by more operating leases," Maeder said.

Intuitive's earnings of $3.52 a share topped Wall Street expectations of $2.64 a share in a FactSet survey. First-quarter revenue of $1.29 billion rose 18% and beat analyst expectations of $1.11 billion. 

The company placed 298 surgical-device systems in the quarter, a 26% increase year over year. The total included 190 in the U.S. and 108 elsewhere.

Read More: Intuitive Surgical Analysts Mixed After Earnings Report

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For the first time since the pandemic started, Intuitive provided guidance, with procedure growth expected in a range of 22% to 26% year over year. 

"ISRG has navigated the pandemic nicely and the long-term outlook appears bright," Maeder said.

But the neutral rating reflects the firm's preference "to wait for additional visibility into the near-to-medium term picture, at these valuation levels, before becoming more constructive on [the] shares," Maeder said. 

The price-target increase reflects the company's "solid financial/operational progress" and some expansion of multiples in the company's peer group. 

The target is 53 times Piper Sandler's forecast for Intuitive Surgical's 2022 adjusted earnings. 

Intuitive Surgical shares at last check were 6.8% higher at $866.47.