Caris: Varian Medical to $82

Varian Medical ($VAR) is one of those stocks I always hope will pull back but never seems to. It just goes up and up.

Barron’s notes that Caris recently raised its one-year price target for Varian to $82 per share.

We are upgrading Varian to Buy from Above Average: While the company has taken about 15 cents of dilution a year investing in proton therapy, we now expect that to reverse as we approach 2015.

Still a bit off, as Varian will not be able to book profits initially until completion, but a DCF/discounted-EPS valuation indicates an $8-$12 incremental to the current stock price and erasing some of the dilution in 2013. Adding this to our $72 price target, which is based on 18 times our 2012 EPS assumption, gives a 12-month price target of $82.

Posted by on March 12th, 2012 at 1:33 pm


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