Investors are watching Intuitive Surgical ahead of its first-quarter earnings report this week. A major point of focus centers on how new tariffs might affect the robotic surgery company.
Intuitive Surgical makes its instruments and accessories mainly in Mexico. Reports indicate about 90% of these products come from facilities south of the border.
As of April 2, goods from Mexico face an approximate 25% tariff. An exception exists for items that comply with the U.S.-Mexico-Canada Agreement (USMCA). This trade pact now shapes the potential cost to the company.
Analysts note that Intuitive has not yet detailed what percentage of its Mexico-made instruments meet the USMCA criteria. Investors expect management to provide clarity on this issue during the earnings call scheduled for Tuesday.
The company already has some instrument and accessory manufacturing in the United States. Analysts speculate Intuitive could shift more production to U.S. sites to mitigate tariff impacts.
Despite tariff worries, some analysts remain positive about other parts of Intuitive's business. They predict the company may forecast stronger procedure growth for its robotic systems. Placements of its newest da Vinci 5 robot are also expected to continue at a solid pace.
Other companies have already discussed tariff costs. Abbott expects hundreds of millions in tariff-related expenses this year. Johnson & Johnson forecast $400 million in similar charges. J&J also reported a dip in some electrophysiology sales. Tariff discussions appear likely to continue as more medtech firms release results.
ISRG Stock performance could hinge significantly on the company's guidance regarding tariff exposure. Strong underlying business trends in procedures and system sales may offset some tariff-related headwinds.
