Jefferies Reiterates Buy on Varian Medical Systems (VAR) Following Analyst Day
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Jefferies reiterated a Buy rating and $102.00 price target on Varian Medical Systems (NYSE: VAR) following the company's analyst day. Varian CEO Dow Wilson provided an update on the timing of the spin which suggested the potential for a delay into early '17 from the original target of a 12/31 separation. Management reiterated its goal of achieving 5% org. growth vs. a blended 4% for its end markets.
Analyst Anthony Petrone commented, "Key takeaways were: 1) spin date could get pushed back by a month due to regulatory timing; 2) plenty of room to grow within $4bn current TAM on OEM wallet share gain alone; 3) CMS reimbursement cut to film imaging in 2018 a catalyst to accelerate analog-to-digital conversion; 4) strategy still calls for M&A with a variety of options being explored; 5) outlook for 300bps+ of margin expansion and FCF profile improvement reiterated."
Shares of Varian Medical closed at $91.36 yesterday.
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