Tuesday, Truist Securities has increased the price target on Intuitive Surgical (NASDAQ:ISRG) to $515 from $450 while retaining a Buy rating on the stock. The new price target represents a significant increase and reflects a positive outlook on the company's future financial performance.
The firm's analyst cited a projected price-to-earnings (P/E) multiple of approximately 72 times the adjusted 2025 earnings per share (EPS), which deducts interest income to arrive at $6.84, plus an estimated $24 in cash per share. This valuation is based on the upper end of Intuitive Surgical's historical P/E premium range relative to the S&P 500, which has been between 2.5 to 3 times over the past three years.
The analyst supports the premium valuation by pointing to Intuitive Surgical's consistent and high procedure growth. Additionally, the anticipation of a new product cycle from the company, which is known for its innovation in the medical technology sector, is expected to significantly accelerate revenue and EPS growth, potentially outperforming current and consensus estimates in the forthcoming years.
The maintained Buy rating suggests that Truist Securities continues to view Intuitive Surgical as a strong investment opportunity, with the stock deserving of a higher multiple at the upper end of its historical range. The company's sustained growth and upcoming innovations are seen as key drivers for this optimism.
The new price target of $515 reflects the firm's confidence in Intuitive Surgical's ability to maintain its lead in the medical technology industry and capitalize on new product developments to drive financial growth.
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