Goldman Sachs analyst David Roman raised Intuitive Surgical's price target to $558, arguing that the 28% stock decline this year is based on a misunderstanding of recent instrument lifespan changes. Several other analysts downgraded the stock after first-quarter earnings, but Roman contends that extending the use of force-feedback tools from six to 15 uses will not hurt revenue per procedure and was aimed at easing supply chain bottlenecks. A second change increasing the lifespan of older standard instruments may slightly reduce instruments and accessories revenue, which grew 23% to $1.69 billion in the first quarter, but Goldman models only a 1% annual decline in U.S. revenue per procedure. The bank points to the 2020 Extended Use Program, where a projected 7% revenue drop turned into just a 2% actual decline before growth resumed. Intuitive's overall first-quarter revenue rose 23% to $2.77 billion, with earnings per share up 18.7% to $2.28, and procedure volume increased 16% to 847,000.
Intuitive Surgical IncGoldman Sachs raised price target to $558, arguing sell-off is a misunderstanding of instrument lifespan changes.
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