Jefferies Reiterates Buy Rating on Varian Medical

Jefferies is out with a research report this afternoon, where it reiterates its Buy rating on Varian Medical (NYSE: VAR); it has $72.00 a price target on the stock, down from $79.00.

The Jefferies analysts cited the company's recent earnings results, which missed estimates. The company also issued initial F12 guidance calling for 10-11% top-line growth ($2.856B-$2.882B) and EPS of $3.92-$4.02 (14-17% y/y growth) which compared favorably to consensus of $2.833B and $3.96.

As for valuation, the analysts remarked, “Our revised $72 PT is a blended avg. of: 1) C12 18.0x P/E, 2) 7x C12 EV/EBITDA multiple, and 3) a 10 year DCF. Risks: 1) Hospital budgets, 2) Reimbursement pressure.”