On Friday, Bernstein SocGen Group updated its outlook on shares of Intuitive Surgical (NASDAQ:ISRG), increasing the price target to $700 from the previous $655, while maintaining an Outperform rating on the stock. The adjustment follows Intuitive Surgical's impressive fourth quarter pre-release, which showcased a substantial revenue beat and robust growth in procedures.
The company reported fourth-quarter revenue of $2.41 billion, marking a 25% increase year-over-year and surpassing the consensus estimate of $2.2 billion by 9%. This growth was attributed to a significant 18% rise in procedures, higher than the anticipated ~16%.
Notably, U.S. general surgery procedures expanded by 19%, and international procedures—primarily cancer-related, along with some early-stage benign procedures—saw a 23% increase. The management highlighted the UK, Italy, Japan, and Germany as key contributors to the overseas growth.
Instrument and accessory (I&A) revenue also exceeded expectations, reaching $1.4 billion, a 23% rise from the previous year and 5% higher than the consensus estimate of around $1.3 billion. The major driver behind the revenue outperformance was the systems revenue, which grew by 36% to $655 million, significantly ahead of the consensus forecast of $515 million by 27%. This was underpinned by robust system shipment numbers.
Despite the challenging capital environment in Europe, Intuitive Surgical managed to sustain global installed base growth at levels not seen in a decade, led by strong system placements in the U.S. In light of these achievements, Bernstein SocGen Group's analyst Lee Hambright reaffirmed Intuitive Surgical's status as the top pick in the U.S. Medtech space and raised the target price to reflect an improved growth outlook and upward estimate revisions.
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