Intuitive Surgical's Outlook 'Has Never Been Stronger,' Analyst Says After Q2 Report

Intuitive Surgical, Inc.'s ISRG second-quarter report Tuesday was “surprisingly positive,” according to Canaccord Genuity.

The Intuitive Analyst: Cecilia Furlong maintained a Buy rating on Intuitive and raised the price target from $562 to $725.

The Intuitive Thesis: Intuitive faced headwinds from the coronavirus pandemic in the quarter, but the company’s system sales and procedural volume were both “well ahead of consensus projections” and showcased a “faster-than-anticipated recovery,” Furlong said in a Wednesday note. (See her track record here.) 

The analyst named the following as Intuitive's strengths: 

Geographic Diversity: The company’s geographic diversity will help “offset potential future rolling weakness in specific regions,” she said. In the second quarter, Intuitive had strong sales in Asia, which complemented its sales in the U.S., Furlong said. 

Strong Value Proposition: In a COVID-19 world, minimally invasive robotic procedures will help address “the focus on streamlining patient care and minimizing hospital LOS,” the analyst said. 

New Extended Use Program: Intuitive announced its Extended Use Program to commercialize select instruments that have longer usage lifetimes than current instruments. This program will “further entrench [Intuitive] within its customer base ahead of impending competition” and help it become more competitive, she said. 

The long-term outlook for Intuitive “has never been stronger,” Furlong said.

ISRG Price Action: Intuitive shares were higher by 3.52% at $681.34 at the close Wednesday. 

Photo courtesy of Intuitive Surgical.