Illumina downgraded to hold at Argus on poor near-term outlook
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Argus has downgraded Illumina (NASDAQ:ILMN) to hold from buy citing falling margins and worsening outlook.
Analyst Jasper Hellweg noted that in Q3 2022, the company's adjusted gross margin fell 280 basis points to 68.4%, adjusted operating margin fell 1430 basis points to 9.2%, and adjusted profit margin fell 1510 basis points to 4.8%.

The stock is down 41% over the last year. Hellweg said that despite this, shares are trading 86 times Argus' 2023 estimate, and well above the average of 36 for other life science equipment companies.
"With its limited room for upside and the stock's susceptibility for sharp declines, we believe that a HOLD rating is now appropriate," he wrote.
Hellweg added that a stock upgrade could happen if Illumina (ILMN) demonstrates several quarters of margin improvement, growth in product revenue, or signs of strong demand for its new sequencing machine.
After lowering its 2023 guidance earlier in January, Seeking Alpha contributor William Meyers reaffirmed his sell rating for Illiumina (ILMN).