CITIC Securities initiates coverage on Intuitive Surgical with a "Buy" rating and a target price of $613, the absolute leader in the surgical robotics field

China Merchants Securities published a report, initiating coverage on Intuitive Surgical (ISRG.US) with a "Buy" rating and a target price of $613. The firm stated that the recent IPO of Precision Medical-B (02675.HK) has attracted significant market attention. As a global valuation anchor, Intuitive Surgical is an absolute leader in the surgical robotics field, significantly ahead in installed base, surgical volume, and technology, and it is recommended to focus on leading companies that capture the certainty of industry growth. The fifth-generation "Da Vinci 5" system has significantly improved equipment utilization, accelerated market penetration, and strengthened customer loyalty.

The firm noted that the growth of surgical volume at Intuitive Surgical is still accelerating, with consumables and service revenue driving the company's high certainty growth. Last year, the Da Vinci surgical volume reached approximately 3.15 million cases, an 18% year-on-year increase (including the Ion system, total surgical volume increased by 19% year-on-year), with surgical volume being the main growth driver for the company. Looking ahead to 2026, the company guides for a 13% to 15% increase in Da Vinci surgical volume, with consumables and service revenue growth remaining resilient.

Additionally, China Merchants Securities stated that the upgrade of the fifth-generation system "Da Vinci 5" has driven efficiency realization, with average surgical volume increasing by 11%. From a market perspective, laparoscopic surgical robots are still in a development phase, transitioning from emerging procedures to mainstream surgical types. The mid-term accessible market is estimated to have approximately 9 million surgical cases annually, compared to 3.15 million surgical cases in 2025. Based on the current penetration rate, there is still about double the growth potential for surgical volume in the future.

The firm expects the company's revenue and profit for the years 2026 to 2028 to maintain a stable and rapid growth trend. It estimates revenue to increase by 16%, 15%, and 15% year-on-year, with net profit increasing by 16%, 16%, and 15% year-on-year, and diluted earnings per share forecasted at $9.15, $10.63, and $12.17, corresponding to price-to-earnings ratios of 56x, 48x, and 42x for the years 2026 to 2028, respectively