UPDATE: Morgan Stanley Reiterates On Varian Medical Systems On Mid-Year Updates

In a report published Wednesday, Morgan Stanley analyst Steve Beuchaw reiterated an Underweight rating on Varian Medical Systems VAR, but removed the $76.00 price target. In the report, Morgan Stanley noted, “Financial takeaways in line with our expectations; Oncology revenue still the key variable. Varian is confident in EBIT margin expansion, consistent with our expectations, and continues to expect revenue in Oncology +5-8%, Imaging +10-12%, and at $200-300mn peak in Proton. Our estimates remain more conservative in Oncology given ongoing backlog deceleration and our expectation for tougher US reimbursement. "While gross orders have been encouraging, recent strength is in part a reflection of a larger proportion of multi-year orders and more frequent service contract advance bookings.” Varian Medical Systems closed on Tuesday at $80.86.