Intuitive Surgical: Oppenheimer now bullish, sees competition being "crowded out"

Investing.com -- Oppenheimer upgraded Intuitive Surgical to Outperform from Perform with a $500 price target in a note on Wednesday, arguing the company's strategy of "Crowding Out Competitors" is strategically smart.

Analyst Suraj Kalia said the change reflects "a more nuanced risk-reward assessment at these levels."

On the positive side, the firm views U.S. competition as a "non-factor," with field checks suggesting "some unique workflow challenges for Ottava that limit long-term appeal" and real-estate issues for Hugo.

It added that Intuitive's customized price-volume contracts complicate competitor returns, while its per-click model "provides tremendous flexibility in lower-acuity ASC penetration."

Oppenheimer's checks on Johnson & Johnson's Ottava platform flagged both strengths and drawbacks.

Positives reportedly included a smaller footprint than Hugo and a console similar to daVinci with no learning curve.

However, the firm said arm deployment "in a non-sterile environment 'after' anesthetized patient placed on table presents unique workflow challenges," alongside limited production capacity of 20 and 100 systems in 2026 and 2027.

The firm was less optimistic about international competition, where about 34% of Intuitive's sales come from. It named homegrown Chinese platforms Medbot, Kangduo and Toumai as "the biggest threats from a pricing/market share perspective."

Oppenheimer expects the aggregate robotic surgery market to grow to about 5.5 million procedures by 2030, and said Intuitive's "tactics of flooding the zone with operating leases and customized contracts" are financially punitive for U.S. rivals, though it noted the need to push daVinci into more price-sensitive, lower-acuity cases.

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