Dougherty & Co Starts Varian Medical (VAR) at Buy; Solid Long-Term Prospects for the Leading Radiation Oncology Manufacturer
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Price: $177.07 --0%
Rating Summary:
7 Buy, 9 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
7 Buy, 9 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Dougherty & Co initiates coverage on Varian Medical (NYSE: VAR) with a Buy. PT $78.00.
Dougherty analyst says, "As U.S. hospitals slowly recover from the financial crisis and recession—and capital expenditure budgets gradually open up again—we see hospitals make investments in big-ticket radiation oncology. The rationale is simple: Radiation oncology is a high-margin/high revenue generation service for a hospital ($15-20K/patient/year)...We expect Varian’s TrueBeam System to continue making inroads at U.S. and international hospitals."
"New Linear Accelerators a Possibility. We’ve heard that Varian could be working on additional linac technology, including: 1) Lower-priced linacs with imaging capabilities (~$1 to $1.5MM/machine)—compelling, in our view, for price-sensitive international customers. 2) Smaller footprint linacs which could fit in modest-sized radiation oncology suites—a Silhouette-branded TrueBeam System, could be on tap for 2012."
"We Could See a Deal or Two on the Horizon. Varian management has expressed a greater willingness to explore M&A deals which can move the sales and earnings needle. With $600MM in cash, ~90% of which is overseas, we wouldn’t be surprised to see an OUS-domiciled deal. Potential transactions could include: 1) A software/informatics company. 2) A components manufacturer (i.e. vertical integration)."
For an analyst ratings summary and ratings history on Varian Medical click here. For more ratings news on Varian Medical click here.
Shares of Varian Medical closed at $68.27 yesterday.
Dougherty analyst says, "As U.S. hospitals slowly recover from the financial crisis and recession—and capital expenditure budgets gradually open up again—we see hospitals make investments in big-ticket radiation oncology. The rationale is simple: Radiation oncology is a high-margin/high revenue generation service for a hospital ($15-20K/patient/year)...We expect Varian’s TrueBeam System to continue making inroads at U.S. and international hospitals."
"New Linear Accelerators a Possibility. We’ve heard that Varian could be working on additional linac technology, including: 1) Lower-priced linacs with imaging capabilities (~$1 to $1.5MM/machine)—compelling, in our view, for price-sensitive international customers. 2) Smaller footprint linacs which could fit in modest-sized radiation oncology suites—a Silhouette-branded TrueBeam System, could be on tap for 2012."
"We Could See a Deal or Two on the Horizon. Varian management has expressed a greater willingness to explore M&A deals which can move the sales and earnings needle. With $600MM in cash, ~90% of which is overseas, we wouldn’t be surprised to see an OUS-domiciled deal. Potential transactions could include: 1) A software/informatics company. 2) A components manufacturer (i.e. vertical integration)."
For an analyst ratings summary and ratings history on Varian Medical click here. For more ratings news on Varian Medical click here.
Shares of Varian Medical closed at $68.27 yesterday.
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