Varex Imaging: Oppenheimer cuts to perform from outperform

Oppenheimer has downgraded Varex Imaging (NASDAQ:VREX) to "Perform" from "Outperform," while lowering its price target to $18.00 from $23.00. The firm maintains a positive outlook on Varex’s long-term prospects, citing the company’s "best in-class X-ray core competency" and a "sticky" end-user base. Analysts also highlighted Varex’s recent production expansion, including the initiation of radiographic detector manufacturing in India and the anticipated CT tube factory launch.

Varex’s fourth-quarter fiscal 2025 results exceeded expectations, with revenue reaching $229 million—above both Oppenheimer’s forecast and the consensus estimate. The company also reported earnings per share of $0.37, significantly higher than the projected $0.17. Despite the downgrade, the firm views Varex as a "deep-value name," supported by a strong free cash flow yield and a current ratio of 3.43.

Analysts expect Varex to return to profitability in fiscal 2026, with an estimated EPS of $0.74. The stock currently trades below its calculated fair value, offering potential upside for investors.