Illumina jumps as analysts cheer beaten-down stock after investor day
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Illumina (NASDAQ:ILMN) posted the second-best intraday gain for the year on Tuesday following its 2022 Investor Day, as Wall Street heaped praise on the gene sequencing company, the shares of which have sold off this year.
Ahead of the event, ILMN launched a new series of sequencing instruments called NovaSeq X Series that it said could read an individual's genetic information for as low as $200 per genome.
SVB Securities said that the more advanced NovaSeq X+ product in the series should become "The Ultimate Genome Machine" and the instrument of choice as the markets pivot to whole genome sequencing from panels and exomes amid a rise in cancer screening.
The analysts led by Puneet Souda upgraded the stock to Outperform from Market Perform and raised its price target to $270 from $220 per share. They, however, warned that the concerns over inability to find a permanent finance chief and prior execution would persist.
"â¦.with 2023 being a transition year for the new product launch, we see an improving outlook where the precise entry point would be hard to time," the team wrote.
Meanwhile, Cowen analyst Dan Brennan with an Outperform rating on ILMN, noted that the management detailed a highly "constructive outlook for sequencing demand, the new product cycle, and competitive positioning."
However, the analyst attributes Monday's decline in ILMN shares to the remarks on cancer test developer Grail, which the company had previously said would divest amid regulatory challenges for its acquisition in the U.S. and EU.
Citi analyst Patrick Donnelly who has a Neutral rating on ILMN, notes that the long-term targets set by the management were "largely in line with expectations."
The analyst left the event with a constructive view "on the long-term setup for ILMN, driven by NovaSeq X catalyzing a new instrument replacement cycle." However, uncertainty over the Grail acquisition keeps Donnelly on the sidelines in the near term.
ILMN shares have lost ~49% in 2022, mainly due to a Q2 miss that led to a sharp selloff in August.