Intuitive Surgical (NASDAQ:ISRG) Trading as Steep Premium to Peers

Looking ahead, Brigantine sees Intuitive Surgical (NASDAQ:ISRG) needed a strong macro-economic environment to grow, along with expanded penetration of da Vinci.

Brigantine says, "We maintain a Hold rating and think the prospect of upside to our conservative projections will hinge on an improved macro environment, along with the company’s ability to drive system upgrades and increase da Vinci’s penetration in surgical categories outside of hysterectomy and prostatectomy. We see Q4 revenues rising 6.6% to $344.4M and see EPS of $2.05 vs. the year-ago $1.95. In our view, valuation expansion will be challenging with ISRG priced at 29x our 2011 EPS estimate and 7.5x estimated 2011 revenues, sharply ahead of peers.

"...However, with the stock trading at steep premiums to peers we remain on the sidelines and calculate fair value in the $275-$300 range."

Brigantine Advisors reiterates a "Hold" rating on Intuitive Surgical (ISRG), which closed Tuesday at $296.32, gaining $8.04, or 2.79 percent.