UPDATE: Citigroup Cuts Target on Varian Medical Systems to $70

Citigroup reiterates its Neutral rating on Varian Medical Systems (NYSE: VAR) and lowers its price target $1 to $70 on continuing weakness in oncology.

Citigroup comments, "This was the second quarter in a row that VAR posted a low quality quarter by missing the top line and posting negative North America (NA) oncology growth, but lowered operating expenses and partially made up for the shortfall with strong OUS oncology performance. The OUS oncology segment is clearly a key driver for the company (orders were up 22% vs. +12% expectations), but NA fell 11% (vs. expectations of +3%) as 2-3 large orders were pushed out until later in the year and free standing clinics (30% of the US market) are showing no signs of meaningful recovery."

VAR closed at $69.24 a share yesterday.