{"id":13049,"date":"2023-11-17T16:46:21","date_gmt":"2023-11-17T16:46:21","guid":{"rendered":"https:\/\/infundpros.com\/investment\/as-illumina-stock-bounces-off-a-10-year-low-analysts-see-no-quick-fix\/"},"modified":"2023-11-17T16:46:22","modified_gmt":"2023-11-17T16:46:22","slug":"as-illumina-stock-bounces-off-a-10-year-low-analysts-see-no-quick-fix","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=13049","title":{"rendered":"As Illumina stock bounces off a 10-year low, analysts see no quick fix"},"content":{"rendered":"
\n

As shares of Illumina Inc.
\n ILMN,
\n -1.49%<\/bg-quote>
\n trade near 10-year lows, analysts are reining in expectations for the DNA-sequencing company.\u00a0<\/p>\n

Illumina shares fell sharply late last week, after the company cut its full-year sales and profit outlook, and continued their tumble on Monday, falling 5.7% and closing at their lowest level in roughly a decade. At Monday\u2019s close, the stock was down 82% from its all-time closing high in August 2021. Illumina shares got a reprieve early Tuesday, gaining about 5%.\u00a0<\/p>\n

\n

The stock slide comes as Illumina navigates a leadership transition, a new product launch that is lagging expectations, and the potentially costly unwinding of its 2021 acquisition of cancer test maker Grail, which has been beset by antitrust regulatory issues.\u00a0<\/p>\n

Analysts are raising concerns about sluggish uptake of the NovaSeq X Series \u2014 sequencers that Illumina unveiled late last year with the aim of accelerating genomic discoveries and driving down sequencing costs. The company said last week it now expects to ship 330 to 340 NovaSeq X instruments in the full year 2023, down from previous guidance of 390.\u00a0<\/p>\n

The lower expectations are \u201crelatively alarming, in our view, after a seemingly strong start to the launch of a product which the company believes will drive long-term growth,\u201d Canaccord Genuity analyst Kyle Mikson wrote in a report last Friday. Mikson downgraded Illumina shares to hold, from buy, and slashed the price target on the shares to $120, from $210 previously.\u00a0<\/p>\n

To be sure, Illumina isn\u2019t the only life-science tools company hitting speed bumps. Lab equipment makers Mettler-Toledo International Inc.
\n MTD,
\n -0.48%<\/bg-quote>
\n and Thermo Fisher Scientific Inc.
\n TMO,
\n -1.37%<\/bg-quote>
\n also cut full-year guidance in recent weeks, citing tough macroeconomic conditions.\u00a0<\/p>\n

\u201cWe\u2019re running through a very challenging environment that everybody else is seeing,\u201d Illumina CEO Jacob Thaysen said on a call with analysts last week. Thaysen, a former executive at Agilent Technologies Inc.
\n A,
\n -1.48%<\/bg-quote>,<\/span>
\n has been on the job for only about six weeks, replacing Francis deSouza, who stepped down in June amid the company\u2019s proxy battle with activist investor Carl Icahn.\u00a0<\/p>\n

Thaysen now faces the task of unwinding the Grail acquisition, after the European Commission last month directed Illumina to divest the company. Under terms of the order, Illumina has one year to divest Grail and is allowed to explore a range of options, including a third-party sale or capital markets transaction. The ultimate path to unwind the deal remains unclear and potentially expensive for Illumina, Mikson wrote in the report Friday. If Illumina pursues a capital markets transaction, it must capitalize Grail with 2.5 years of funding based on Grail\u2019s long-range plan.\u00a0<\/p>\n

\u201cIllumina maintains that the Commission does not have jurisdiction over this acquisition,\u201d the company said in a statement last month, noting that it has a jurisdictional challenge pending at the European Court of Justice.\u00a0<\/p>\n

Looking ahead, \u201cour initial view is that 2024 results will look very similar to 2023,\u201d Thaysen said on the call with analysts last week. \u201cWe don\u2019t expect near-term improvement to the macroeconomic environment, and geopolitical issues have been persistent.\u201d\u00a0<\/p>\n

That implies that \u201cIllumina\u2019s revenue growth will be nominal for the third year in a row,\u201d Mikson wrote in his note Friday. Without growth, he said, no premium valuation is warranted, and the Grail transaction \u201cnoise\u201d could limit share-price appreciation in the near term.\u00a0<\/p>\n

Analysts who remain bullish on the stock are also slashing their price targets. Leerink Partners analysts on Friday reiterated an outperform rating on the stock but cut their price target to $140, from $205 previously, noting that the NovaSeq X sales figures represent a \u201cstep-back for a high demand instrument\u201d that will likely \u201craise a number of questions about the overall demand in the market,\u201d versus potential competition.\u00a0<\/p>\n

At Evercore ISI, analysts maintained an outperform rating on Illumina shares, but cut their price target to $160, from $180 previously. The deceleration in NovaSeq X is \u201cnot a great sign,\u201d the analysts wrote, yet management has indicated that customer interest remains high.\u00a0<\/p>\n

Illumina shares are down nearly 52% year to date, while the S&P 500
\n SPX
\n has gained 17%. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

As shares of Illumina Inc. ILMN, -1.49% trade near 10-year lows, analysts are reining in expectations for the DNA-sequencing company.\u00a0 Illumina shares…<\/p>\n","protected":false},"author":1,"featured_media":13050,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":{"0":"post-13049","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investment"},"yoast_head":"\nAs Illumina stock bounces off a 10-year low, analysts see no quick fix | inFundPros<\/title>\n<meta name=\"description\" content=\"As shares of Illumina Inc. 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