UPDATE: Jefferies Lowers Varian Medical's PT
According to a research report published this morning, Jefferies has decreased Varian Medical's (NYSE: VAR) PT from $75 to $73.
In the report, Jefferies commented, "More than other recent quarters that also had some challenges (4Q11 EPS miss, 1Q12 order push outs),Varian Medical's (VAR) F2Q12 was truly a mixed bag, with much stronger-than-expected North America oncology orders (+14% vs. +1% JPMe) largely overshadowed by the realities of margin pressure, as VAR ramps the proton business (0% GM during initial build) and makes push into price sensitive international markets, which tend to be 2-5% lower margin on average for oncology. In light of the mix shift toward international, the focus is increasingly on cost controls and future sources of leverage (i.e., supply chain, pricing), although lost in the noise may be the fact that both proton and the new Siemens agreement are expected to be margin enhancing (likely 2013+)."
Jefferies maintains its Overweight rating on Varian Medical, which closed yesterday at $69.79.
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