Illumina (ILMN) PT Lowered to $164 at Scotiabank

Scotiabank analyst Sung Ji Nam lowered the price target on Illumina (NASDAQ: ILMN) to $164.00 (from $176.00) while maintaining a Sector Outperform rating.

The analyst commented: "With the GRAIL separation (June) now in the rearview mirror and post-2Q24 earnings last week, ILMN hosted a short Strategy Update call yesterday. ILMN provided 2025-2027 financial targets, calling for revenue growth acceleration to high single digits by 2027 (from -2% to -3% y/y decline in 2024), 500+ bps non-GAAP operating margin expansion through 2027 (from 20.5-21% in 2024; incremental ~$200mm in cost savings), and double-digit to teens non-GAAP EPS growth annually. While below the historical growth profile for ILMN, we believe the initial targets provide a solid, tangible baseline for ILMN/new management to aim for, against the backdrop of limited visibility sector-wide for life science tools industry growth potential over the next 12 to 18 months. We still believe there is potential for ILMN to further accelerate its top line growth longer-term, given the total serviceable addressable market growth potential for ILMN of ~12% CAGR in aggregate over the next decade (from ~$10bn today, for both clinical and research), ILMN’s innovation pipeline, and still unparalleled competitive position. For now, we are lowering 2024 and 2025 revenue estimates and price target to $164 (from $176). Reiterate Sector Outperform."

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