Intuitive Surgical initiated with an Outperform at Leerink

Leerink initiated coverage of Intuitive Surgical with an Outperform rating and $342 price target. The firm notes shares have come under pressure recently, partly due to potential concerns over the potential impact that accelerating adoption of incretins could have on certain target procedures for Intuitive Surgical, such as bariatric surgery. Additionally, surgical robotics will also be an evolving market over the next few years, as several new competitor systems are expected to launch in the U.S. However, Leerink continues see an attractive setup for Intuitive Surgical’s shares, with its analysis suggesting the total impact from declining bariatric procedure growth on Intuitive Surgical’s total revenue is unlikely to surpass 5% even in the most extreme circumstances, while new market entrants on the horizon could ultimately help accelerate the overall growth of the surgical robotics market without capturing significant share from it.