Q4 Preview: Seasonally-Strong Year-End Quarter Could Bode Well for Intuitive Surgical (ISRG)

Shares of Intuitive Surgical Inc. (Nasdaq: ISRG) are trading up nearly 0.9 percent Thursday ahead of the release of its fourth-quarter results after the closing bell.

Analysts on the Street are expecting Intuitive Surgical to report $3.35 per share in earnings on $483.72 million in sales. During the fourth quarter of last year, the company reported earnings of $3.02 per share on $389.3 million in total sales.

For the full year 2011, analysts on the Street are currently estimating $11.90 per share in earnings on $1.74 billion in total sales.

The fourth quarter conference call is scheduled for 4:30 pm ET, Dial-in Numbers: 800-230-1059 or 612-234-9959, no passcode required.

According to data from Bloomberg, shares of Intuitive Surgical have seven Buy ratings, ten Hold ratings and zero Sell ratings. The average price target on shares of ISRG is $476 with a range from $370 to $550.

Analyst Comments:

• Goldman Sachs is slightly bullish on sales but not earnings for the quarter: sees $487 million in revenue and $3.31 per share earnings. The firm notes the fourth quarter is typically stronger for the company as hospitals allocate the remaining funds within the annual budget. For the first quarter of fiscal 2012, Goldman forecasts the company will sell 21 percent more systems than 2011.
  
  An analyst at Goldman comments, “While we view the company’s growth prospects and fundamentals positively, we do not see material upside from current levels, especially as the stock has outperformed the S&P 500 by over 6,000 bp over the past year.”
  
  Goldman reaffirmed its Neutral rating and $466 price target on the company going into the release.
  
  
• Cantor Fitzgerald is bullish with its sales estimate of $477.8 million for the quarter. The firm’s earnings estimate of $3.31 per share is below the Street’s consensus. Cantor anticipates management will reach its target goals detailed in its 2011 guidance and states investors and analysts will be more concerned about news on the upcoming quarter. For 2012, the firm forecasts guidance ranges will bracket the Street’s consensus although the mid range will be below.
  
  An analyst at Cantor Fitzgerald said, “Intuitive executed superbly on all fronts last year, but that strong performance was more than reflected in the stock's 80 percent rally during 2011. We expect more strong results in 2012, particularly with the two instrument approvals, but the law of large numbers suggests that growth will inevitably slow, and at these levels, the risk/reward profile does not look favorable to us.”
  
  Cantor Fitzgerald maintained a Hold rating and $450 price target on shares of ISRG ahead of the fourth quarter release.
  
  
• Collins Stewart is extremely bullish on sales for the quarter with its estimate of $482 million. Although the firm’s sales estimate tops the Street’s consensus, its earnings estimate of $3.32 per share falls below. Collins Stewart said, “We look for color on the call regarding prostatectomy trends in Europe given its adoption curve. In addition we look for an update on hysterectomy trends in the US. EU prostatectomy and US hysterectomy remain the two largest near-term growth drivers for ISRG.”
  
  Collins Stewart reiterated its Buy rating and $475 price target on the company ahead of the release.

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