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Illumina (ILMN) Lower as Morgan Stanley Cuts Numbers, Sees Slow Growth Persisting

December 7, 2016 10:23 AM EST
Get Alerts ILMN Hot Sheet
Price: $137.32 -0.98%

Rating Summary:
    16 Buy, 19 Hold, 5 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Illumina (NASDAQ: ILMN) is sharply lower early Wednesday (-4.6%) after Morgan Stanley Steve Beuchaw reiterated his Underweight rating while cutting estimates and his price target to $110.00 (from $115.00) saying slower growth is likely to persist. The firm cut 2017 estimates to 10% revenue growth and EPS of $3.57.

Beuchaw highlighted:

1) Our latest survey work suggests instrument revenue sees pressure continue into ’17;

2) Pharma spend is slowing and Academic funding is likely to remain challenged in the US and Europe for at least 3 more quarters;

3) diligence finds barriers to an inflection in clinical growth remain;

4) diligence on TMO/QGEN competition finds users increasingly optimistic about alternatives to ILMN in clinical;

5) the recent decline of the HiSeq installed base and flat HiSeq X placements present risk to consumables growth and are
evidence of the impact of customer efforts to shift projects to instruments that reduce consumables spend;

6) hospital spending may emerge as a headwind for the clinical channel in '17 sending uncertainty around the future of the ACA in the US. New products and progress at GRAIL are upside risks for ’17 and beyond and competition from Oxford Nanopore and others are downside risks.

For an analyst ratings summary and ratings history on Illumina click here. For more ratings news on Illumina click here.

Shares of Illumina closed at $126.40 yesterday.



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