Barclays downgrades Illumina on China risks, competition

Investing.com -- Barclays downgraded Illumina Inc (NASDAQ: ILMN) to "Underweight" given growing uncertainty in China, rising competition from Roche in the clinical market, and weaker-than-expected elasticity in consumables demand.

The firm said these factors raise concerns about management’s ability to meet long-term revenue projections. "we struggle to see how shares would perform with the rest of the group over the rest of the year," analysts wrote in a note.

Barclays (LON:BARC) lowered its price target to $100 from a prior $130. The firm warned that further multiple contraction is possible if China revenues decline materially.

While acknowledging Illumina’s technological edge, Barclays characterized the company as a mature tools business comparable to other genomics and proteomics firms, which typically exhibit mid-single-digit growth and mid-20% operating margins.

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