Negative rating slashes 10% from Intuitive Surgical | Wall Street Beat

December 20, 2012 by MassDevice staff

A highly negative research report from Citron spooks investors into shaving 11% from Intuitive Surgical shares in 2 days. Wall Street Beat

A research report blasting Intuitive Surgical (NSDQ:ISRG) spooked investors on Wall Street yesterday and today, prompting a selloff that's shaved some 11% from the medical device company's share price.

Citron Research, citing several factors that investors had ignored, said yesterday that it expects ISRG shares to drop to $350 over the next year and as low as $250 over the next 18 months.

ISRG shares began yesterday at $547.33 each, but as The Street digested the Citron report unusually heavy trading plunged the stock to a $515.45 close, down 5.7% on the day. Shares opened today at $508.82 and slipped another 5.3% to close at $488.31 apiece.

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The Citron researchers said the stock's high earnings multiple belies "a track record of excessive and unjustified marketing claims, the utter lack of clinical evidence of superior medical outcomes when using its product for surgery, and the gathering storm of legal liability accruing to the company due to its failure to adequately disclose risks prior to its technology causing adverse surgical outcomes, scattered among the hundreds of thousands of surgeries performed with its robotic surgery devices," according to their report (PDF).