Leerink Trims PT on Illumina (ILMN) to $185 Following Negative Q3 Preannouncement
Leerink trims its price target on Market Perform-rated Illumina (Nasdaq: ILMN) from $185 down to $155 following cut Q3, FY15 guidance issued Monday night.
Analyst Dan Leonard commented, We believe any read through from ILMN’s results to the broader tools group will be modest at best.
The analyst also noted the following:
- Weaker Q3, full year revenue outlook attributed to product, geographic concerns. ILMN noted weaker than planned sales of its MiSeq and NextSeq instruments, which comprise its desktop sequencing offering. We do wonder if desktop weakness might be correlated to challenges for diagnostics reimbursement in the U.S., and expect more detail on the Q3 call. ILMN also noted weakness geographically in Japan (down $6M sequentially) and Europe (+6% y/y growth).
- Sequencing consumables overall were strong. We are encouraged by the strength of ILMN’s sequencing consumables portfolio in aggregate. $270M in revenues from these products exceeded our forecast of $255M.
- Still like the growth outlook over the medium term. We still believe ILMN can deliver 15% - 20% revenue growth in the medium term (2016 – 2017). The high end of this range might be dependent on a new instrument, or a sharp inflection in ILMN’s diagnostics markets. We remain sanguine on the long-term opportunity for nextgen sequencing and ILMN’s competitive position
For an analyst ratings summary and ratings history on Illumina click here. For more ratings news on Illumina click here.