| Over a week ago | ||||
Medtronic (MDT), when… Medtronic (MDT), when reporting fiscal Q4 results today, said its ability to complete required software system and pre-clinical testing for its surgical robot has been delayed due to COVID-19, Piper Sandler analyst Adam Maeder tells investors in a research note. The analyst, who believes the Medtronic surgical robot system could be delayed by roughly two quarters, views today's update as an "incremental positive" for Intuitive Surgical (ISRG). Intuitive is well positioned from a competitive standpoint and any material delays to new market entrants could further strengthen its first-mover advantage, contends Maeder. The analyst, however, keeps a Neutral rating on the shares with a $510 price target citing a lack of visibility on new system placements and valuation. | ||||
Intuitive Surgical has… Intuitive Surgical has been awarded a maximum $420M firm-fixed-price, indefinite-delivery/indefinite-quantity contract for surgical robots, instruments and their related accessories. This is a five-year contract with no option periods. This was a competitive acquisition with 105 responses received. Location of performance is California, with a May 5, 2025, performance completion date. Using customers are Army, Navy, Air Force, Marine Corps and federal civilian agencies. Type of appropriation is FY20 through FY25 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support. | ||||
| Over a month ago | ||||
After speaking to… After speaking to management, Piper Sandler analyst Adam Maeder says the biggest component of Intuitive Surgical's financial support program are credits related to Da Vinci service costs. These will help provide financial relief to hospital customers who are experiencing lower procedure volumes due to the COVID-19 pandemic, Maeder tells investors in a research note. Intuitive expects these will lower the company's service revenue primarily in Q2 and to a lesser extent in Q3, adds the analyst. Maeder reduced Intuitive's 2020 sales estimate to $3.759B from $3.867B and adjusted earnings per share estimate to $8.05 from $8.87. The company has a strong balance sheet, which provides it the ability to support customers through these measures, says Maeder. | ||||
Intuitive on Tuesday… Intuitive on Tuesday provided an update on its efforts to support customers, communities, and its employees during the COVID-19 pandemic. "The COVID-19 pandemic presents unprecedented challenges to global health care systems, care teams, and communities," said Intuitive CEO Gary Guthart. "Intuitive is focused on the health and safety of our customers, our communities and our employees, through policies and initiatives designed to help." Intuitive and the Intuitive Foundation are working to assemble, donate, and distribute personal protective equipment to hospitals and healthcare facilities. To date, more than 100,000 pieces of PPE have been sourced or built, and then donated for distribution throughout the U.S. The company's goal is to manufacture and donate 1 million more face shields globally. The Intuitive Foundation is also connecting employees with opportunities to volunteer in their communities. Intuitive has taken numerous measures to minimize the spread of COVID-19 while continuing to provide essential services and support to customers. Intuitive implemented a work-from-home policy for the majority of employees globally. For employees who cannot work from home, Intuitive has implemented additional health and safety measures, including maximizing working space, changing shift schedules, and instituting mandatory screening and temperature checks. Intuitive has implemented an expanded paid and sick leave program to support employees who are unable to work due to family care responsibilities, underlying health issues, connectivity issues, or other unique circumstances. The company is also providing premium pay for essential team members who continue to supply customers with the products needed to care for patients. In addition, there are Employee Assistance Programs that have been developed or expanded to provide services and resources specific to the needs of employees at this time. Intuitive recognizes the economic toll that COVID-19 has taken on hospitals and healthcare systems, and is introducing a series of programs to provide financial relief to customers. Intuitive expects that the estimated value of this financial support will range between $90M and $130M, and will not exceed $205M. | ||||
Check out today's top… | ||||
Catch up on today's… Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Intuitive Surgical (ISRG) downgraded to Neutral from Overweight at Piper Sandler with analyst Adam Maeder stating he believes a recovery of the capital equipment spending environment will likely take longer than previously expected. 2. Square (SQ) downgraded to Sell from Neutral at Compass Point with analyst Michael Del Grosso expecting "continued material headwinds" to Square's total payment volume and revenue given its "significant exposure" to small businesses. 3. Floor & Decor (FND) downgraded to Outperform from Strong Buy at Raymond James with analyst Matthew McClintock citing the current economic reality and near-term challenges. 4. Public Storage (PSA) downgraded to Underweight from Equal Weight at Morgan Stanley with analyst Ronald Kamdem saying job growth is the best indicator of storage demand and the firm's economists expect a record-high unemployment rate. 5. Roku (ROKU) downgraded to Neutral from Buy at Guggenheim with analyst Michael Morris stating that with investor sentiment on Roku having strengthened in recent weeks, he sees enthusiasm about the "stay-at-home" environment being priced into the stock. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here. | |
Piper Sandler analyst… Piper Sandler analyst Adam Maeder downgraded Intuitive Surgical to Neutral from Overweight with a price target of $510, down from $570. The stock closed Monday up $2.17 to $517.10. While the analyst expected a "transitory material headwind" from COVID-19, following a deeper analysis, he believes a recovery of the capital equipment spending environment will likely take longer than previously expected. Additionally, Intuitive Surgical shares have held in well since the COVID-19 outbreak, Maeder tells investors in a research note. Given the stock's current valuation relative to its peers and the near-to-medium-term pressure likely on the capital front, he expects Intuitive shares to be range-bound over the next 12 months. | |
Deutsche Bank analyst… Deutsche Bank analyst Imron Zafar lowered the firm's price target on Intuitive Surgical to $500 from $595 and keeps a Hold rating on the shares. The analyst says near-term pressures and uncertain es are "aplenty" post Intuitive Surgical's Q1 results. | |
SVB Leerink analyst… SVB Leerink analyst Richard Newitter downgraded Intuitive Surgical to Market Perform from Outperform with a price target of $535, down from $575. In a research note to investors, Newitter says he expects the prolonged slowdown in hospital capital spend for big ticket items, like robots to cloud visibility around calling "a bottom" for 2020-2021+ estimates. While he still considers Intuitive Surgical a premium MedTech asset, he is reluctant to advocate for putting new money to work in the stock nearer term solely on the basis of an expanding multiple premium while estimates are coming down. | |
Stifel analyst Rick Wise… Stifel analyst Rick Wise raised the firm's price target on Intuitive Surgical to $575 from $425 and keeps a Buy rating on the shares. His recent due diligence suggests that hospitals' appetite for capital purchases, including robotics, could be limited in the near-term, but Wise is still walking up his projections for 2020-2022 after his "aggressive" March 24 revisions. For full-year 2020, he now projects procedure volumes declining 21%, which is improved from his prior forecast for a 27% decline. He then sees them advancing 42% in 2021 and 20% in 2022, the analyst noted. |