UBS Downgrades Illumina (ILMN) to Neutral; Uncertainty Mounts

UBS downgraded Illumina (NASDAQ: ILMN) from Buy to Neutral, slashes price target from $80 to $32.

UBS analyst says, ILMN pre-announced prelim. 3Q sales of ~$235m (-1% y/y) vs. Street $278m. The shortfall resulted from: 1) purchasing delays due to research funding concerns, 2) excess capacity created by new sequencing kits, 3) lower-than-expected HiSeq upgrades, and 4) a decline in Genome Analyzer reagent orders. Guidance for ‘11 has also been pulled. We expect the group to be weak on the news, but note that several 3Q issues are specific to ILMN."

"The company has suspended previous FY11 guidance, which called for rev growth of 24-26% and EPS growth of 33-36%. For FY11, we now project sales of $1,055m & EPS of $1.31 (was $1.52). For FY12, we project sales of $1,129m and EPS of $1.45 (was $1.95). ILMN will formally release 3Q earnings on 10/26."

For more ratings news on Illumina click here and for the rating history of Illumina click here.

Shares of Illumina closed at $39.93 yesterday.

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