Analyst Explains Why They Downgraded Their Rating on Illumina (ILMN)

By Ryan Adsit

Canaccord Genuity analyst Mark Massaro downgraded Illumina (ILMNResearch Report) to Hold today and set a price target of $300. The company’s shares closed yesterday at $304.41.

Massaro said:

“We don’t believe an ultra-premium multiple is now justified for a company looking to grow +6% on the top and bottom lines, which now seem more vulnerable to large misses. What’s more, we lack visibility to 2020 or 2021 growth rates given a wide range of moving parts. We would look to get more constructive if our concerns prove to be transitory, or if ILMN announces the $100 genome at a price point that would meaningfully accelerate its top line and not add further headwinds to its gross, operating or net income margins. ILMN is working hard to drive down the cost of sequencing to be able to usher in the eagerly awaited $100 genome. DTC troubles. On the call, Illumina CEO Francis deSouza indicated he expects a DTC reacceleration “in the coming years,” which to us doesn’t imply a recovery in 2020.”

According to TipRanks.com, Massaro is a top 100 analyst with an average return of 21.4% and a 63.6% success rate. Massaro covers the Healthcare sector, focusing on stocks such as HTG Molecular Diagnostics, Meridian Bioscience Inc, and Quanterix Corporation.

Illumina has an analyst consensus of Moderate Buy, with a price target consensus of $328.67.

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Illumina’s market cap is currently $44.75B and has a P/E ratio of 53.23. The company has a Price to Book ratio of 11.23.

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Illumina, Inc. engages in the development and manufacture of integrated systems for the analysis of genetic variation and function. It operates through the Core Illumina and Consolidated Variable Interest Entity segments (VIE).