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Fly News Breaks for January 27, 2020
Jan 27, 2020 | 06:15 EDT
Deutsche Bank analyst Imron Zafar downgraded Intuitive Surgical (ISRG) to Hold from Buy with a price target of $595, down from $610. The stock closed Friday down 4% to $589.20. With the impending launch of new surgical robot systems including Medtronic's (MDT) Hugo, the impact on Intuitive Surgical and its ability to sustain growth that has been best-in-class has been a big area of investor focus, Zafar tells investors in a research note. However, the analyst's recent due diligence yielded confirmation that a growing number of hospital customers, including world-renowned academic centers and even large hospital systems, have begun or are in late stage discussions to potentially soon begin using repaired da Vinci instruments supplied by third parties. Meaningful operating cost savings opportunity is the key driver compelling hospitals to consider using these repaired da Vinci instruments, Zafar tells investors in a research note. This is a new competitive threat, one that will be an "increasingly meaningful headwind" to Intuitive's U.S. Instruments & Accessories segment over the next couple years, says the analyst. Zafar believes this is "being fully overlooked by the Street."
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