Why Intuitive Surgical Stock Plunged Today

Yahoo

2 days ago

Deutsche Bank downgraded Intuitive Surgical stock to sell this morning.
The banker worries third-party remanufacturers will cut into Intuitive's surgical tools business.
Deutsche's new price target sees 16% downside to the stock.
10 stocks we like better than Intuitive Surgical ›
Intuitive Surgical (NASDAQ: ISRG), the maker of surgical robots and tools for robotic surgery, is taking it on the chin in afternoon trading Monday. Through 2:22 p.m. ET, Intuitive stock has lost 5.5% of its value.
You can blame Deutsche Bank for that.
Deutsche Bank downgraded Intuitive Surgical stock to "sell" this morning, with a $440 price target implying more than 16% downside.
"Intuitive's da Vinci platform has proven to be among the most disruptive technologies in medtech history," admits the banker, with more than 10,000 systems in service globally, performing more than 3 million robotic surgeries per year.
Nevertheless, Deutsche sees risks in the company's business model, primarily to its "Instruments and Accessories" business, where third-party companies have begun "remanufacturing" old surgical instruments, once produced and sold by Intuitive but later worn out and removed from service. In theory, such instruments would be replaced by new equipment produced (and sold) by Intuitive to its customers. Repair and restored-to-service old instruments, however, could cut into that business, potentially reducing the company's U.S. I&A revenue by as much as 46%, warns Deutsche today in a note covered on The Fly.
How worried should investors be about this? Pretty worried, I think.
Consider that Intuitive Surgical stock sells for a sky-high 82 times trailing earnings at present, and requires a brisk growth rate to justify that valuation. Most analysts only expect the company to grow earnings 16% annually over the next five years, however, which isn't really that fast for a growth stock. And now Deutsche is saying even the "16%" could be at risk?
Sounds like a good reason to sell Intuitive Surgical stock and take some profits, if you ask me.
Before you buy stock in Intuitive Surgical, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Intuitive Surgical wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!*
Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of June 9, 2025
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool has a disclosure policy.
Why Intuitive Surgical Stock Plunged Today was originally published by The Motley Fool