Intuitive Surgical (NASDAQ:ISRG), a healthcare stock perhaps best known for the Da Vinci surgical robot, notched up fractionally in Friday afternoon’s trading. It gained a little new analyst perspective that suggests it’s got more life under the hood than some might expect and can keep going longer than expected, too.
Intuitive Surgical landed plaudits from HSBC, whose analysts took a look at the stock and declared it quite worthwhile. It started coverage on Intuitive with a Buy rating. The reasons HSBC cited, meanwhile, make it only more worth a look. HSBC noted that Intuitive Surgical already commands about an 80% market share in the surgical robotics space. That’s good news in and of itself, but it gets better.
The surgical robotics space isn’t exactly an easy market to get in on, and that means that customers are likely to stick with Intuitive Surgical once they’ve made that initial purchase. Any rivals Intuitive Surgical actually has are either significantly smaller or are still quite some distance from full commercialization, which makes it more likely that Intuitive will make that first sale that keeps users on hand.
A Dark Horse Emerges: JNJ Looking to Challenge ISRG
The only way a company could compete with Intuitive on this front is if it were sufficiently well-capitalized to make up for lost time and had sufficient name recognition behind it to break current users free of inertia. And that’s where Johnson & Johnson (NYSE:JNJ) comes in. Reports suggest that Johnson & Johnson is already poised to bring a surgical robot to the clinical testing stage fairly soon, and if it can be used in the same fashion as Intuitive’s, that might make it a player. However, even with Johnson & Johnson’s market cap and name recognition, it’s still going to be a long while before it’s ready to play. That’s time that Intuitive can continue using to secure its market share.
Is Intuitive Surgical a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on ISRG stock based on 16 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 15.96% rally in its share price over the past year, the average ISRG price target of $333.44 per share implies 8.97% upside potential.
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