Piper Sandler increased its price target for Intuitive Surgical (NASDAQ:ISRG) to $620 from $610 on Friday, while maintaining an Overweight recommendation on the company renowned for its surgical robotics technology. This updated target suggests upside potential relative to the current share price of $525.81, albeit InvestingPro data indicates the stock is presently trading above its assessed Fair Value.
The revision follows the release of Intuitive Surgical's fourth-quarter financial results, which surpassed market consensus for both revenue and earnings. Particularly notable was the company's margin strength, with reported gross margins of 67.8% exceeding the anticipated 66.3%, and operating margins of 37.4% outperforming the consensus estimate of 35.5%. This margin performance is consistent with the company’s trailing twelve-month gross profit margin of 66.38% as per InvestingPro metrics, paralleled by a revenue increase of 22.18% over the same timeframe.
Intuitive Surgical reiterated its previously announced guidance for procedure growth of 13-15% year-over-year in 2026. Furthermore, it provided a gross margin outlook for 2026 ranging between 67% and 68%, surpassing Piper Sandler’s earlier forecast of 66.7%.
In light of these developments, Piper Sandler’s refreshed forecast anticipates fiscal year 2026 revenue growth of 14.2% year-over-year to $11.498 billion, alongside adjusted earnings per share of $10.03, reflecting a 12.3% increase. The firm characterized these projections as both realistic and potentially conservative.
The research house described Intuitive Surgical as a leading large-cap asset within the medical technology sector and expects it to execute another strong operational performance in the current fiscal year.
Additional recent figures underscore the company’s robust performance, with fourth-quarter earnings surpassing Wall Street projections. Intuitive Surgical reported earnings per share (EPS) of $2.53, above the predicted $2.26, alongside revenues of $2.87 billion which eclipsed the expected $2.75 billion. The quarter featured a 19% rise in revenue, supported by roughly 20% growth in systems revenue driven by an 8% increase in system placements and elevated average selling prices. Notably, placements of the da Vinci 5 robotic system topped 300 units in the quarter, marking a 26% increase from the prior quarter.
Following the earnings release, Bernstein SocGen and Raymond James revised their price targets upward to $750 and $615, respectively, both maintaining Outperform ratings. Conversely, Evercore ISI lowered its target to $550 but kept an "In Line" rating, illustrating varied analyst perspectives on the company's prospects. Despite a charitable contribution of $70 million to the Intuitive Foundation impacting earnings by approximately 15 cents per share, quarterly EPS grew 14%, exceeding consensus estimates by 12%.
This article was prepared with the assistance of AI and subsequently reviewed by an editor for accuracy and clarity.