by
Lauren Dubinsky, Senior Reporter | May 24, 2016
In his own analysis, Raj Denhoy from Jefferies, reiterated a Buy rating on Varian Medical Systems stock, with a price target of $95,
according to an article on markets.co.
“VAR is moving ahead with a separation of Oncology and Imaging, a move that will allow each business to invest in growth opportunities, including M&A, while pursuing higher profit and cash profiles. Our initial separation math points a fair value of $69-$75 for Oncology and $13-$14 for Imaging, pointing to modest upside from current levels,” said Denhoy.
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Varian expects to spend about $35 million for transaction advisory services, depending on whether it will be completed by the end of 2016. The company doesn't think it will impact its non-GAAP financial guidance for fiscal year 2016.
In 1999, Varian Medical Systems spun off Varian Semiconductor Equipment Associates Inc. and Varian Inc. After that, the company's annual sales grew from less than $600 million to over $3 billion.
Since that spin-off was so profitable, Varian is hopeful that this new spin-off will yield similar results.
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