Citigroup Reiterates Neutral, $62 Target on Varian Medical Systems

Citigroup maintains its Neutral rating and $62 target on Varian Medical Systems Inc. VAR as the risk/reward trade-off for the stock shifts to the reward side. Citigroup comments, “With the company seeing few changes in its growth trajectory this fall (vs. the summer), mgmt. continues to reiterate its ability to grow revs 10% over time through mid/high single-digit Oncology growth, low/mid teens growth in X-ray, Proton reaching annual revs of $200-300M, and Security doubling in size to $200M. For Oncology to grow mid/high single digits, the US will need to grow mid single digits (which is in-line with our expectations), Service is expect to grow mid-teens (mainly from mix), and Emerging Markets are expected to grow double-digits.” VAR closed at $64.54 per share on Wednesday.