Intuitive Surgical analyst raises eyebrows with new stock price target
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Intuitive Surgical analyst raises eyebrows with new stock price target originally appeared on TheStreet.
Jim Cramer wants answers.
The CNBC anchor and Mad Money maven wants to know why Deutsche Bank was being so rough on Intuitive Surgical (ISRG) .
The investment firm downgraded the biotech to sell from hold and slashed its stock price target to $440 from $515.
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"This is quite a controversial call," Cramer said on CNBC's Squawk on The Street, "because this is a premier fast-growing company, premier super growth, and I want to find out more about it."
The Sunnyvale, Calif., company, founded in 1995, specializes in robotic-assisted surgery equipment, most notably the Da Vinci surgical systems, which use a minimally invasive approach.
Intuitive Surgical's shares were down 6.1% at last check but are up 25.4% from a year ago.
Deutsche Bank said in a note to investors on June 9 that remanufactured instruments are going to increasingly encroach on Intuitive's instruments and accessories segment over the next few years.
Analyst sees headwinds for ISRG; Cramer differs
The investment firm expects a growing number of Intuitive's customers to explore adopting remanufactured instruments, given potentially significant profitability gains. The firm cited its discussions with multiple robotic surgery programs.
Remanufactured instruments are previously used surgical instruments that have been rigorously overhauled.
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Deutsche Bank says 46% of Intuitive's U.S. instruments and accessories revenue could be at risk of encroachment by third-party-remanufactured devices.
The firm's model assumes no material impact in 2026 but steadily increasing headwinds in 2027 and especially 2028.
Cramer begged to differ.
"This is a pristine company and people who know this company have been rewarded repeatedly by owning it," he said.
Just a few days earlier, on June 5, Erste Group analyst Hans Engel upgraded Intuitive Surgical to buy from hold, according to The Fly.
The company's operating margin should widen again in 2026 and profit growth should increase significantly, the analyst said.
Engel said that he expected the share price to rise further due to Intuitive's expected acceleration in growth.
On April 2 Intuitive Surgical beat Wall Street's first-quarter earnings and revenue expectations, with sales increasing 19% from a year ago to $2.25 billion.