Dive Brief:
- Intuitive Surgical said it will buy an additional $1 billion worth of its shares under an accelerated stock repurchase agreement.
- The stock buyback comes months after Intuitive purchased and retired $1 billion worth of shares under a $3.5 billion program authorized by its board in July.
- Analysts at RBC Capital Markets said the robotic surgery player “remains committed to returning cash to shareholders” and supporting its stock price.
Dive Insight:
Intuitive shares rose 12 percent on Oct. 18 after the company reported that robotic surgery volumes recovered in the third quarter. That helped take the stock-prices gain to 30% in the past month. While the shares still are down 33% for the year, analysts said the the purchase is evidence of a willingness to support the share price and a show of faith in the business.
“[Intuitive] has been actively repurchasing shares this year,” RBC analysts wrote in a note to investors. “We believe [Intuitive] remains committed to returning cash to shareholders along with supporting its stock price at current levels as it remains confident in the long-term outlook for the company.”
Intuitive’s board increased the amount available under its stock repurchase program to $3.5 billion over the summer. In August, Intuitive used up $1 billion of the amount, leading the analysts to calculate that it will have $1.5 billion still authorized for buybacks after the latest stock purchase.
The company said it expects to settle the latest stock purchase agreement in December, although the process could be accelerated under certain circumstances.
