UPDATE: Wells Fargo Initiates Coverage on Illumina on Prime Market Position
In a report published Tuesday, Wells Fargo Securities analyst Tim Evans initiated coverage on Illumina (NASDAQ: ILMN) with an Outperform rating.
In the report, Wells Fargo Securities noted, “We are initiating coverage of ILMN with an Outperform rating as we believe the stock is the best way for investors to achieve broad exposure to the personalized medicine revolution likely to play out over the coming decade. Illumina has positioned itself as the clear market leader in next-generation sequencing (NGS), which we believe will be the primary tool enabling the application of personalized medicine. Illumina is practically unchallenged in high-throughput sequencing and also has what we believe is the best platform in a duopoly low-throughput sequencing market. Though the risk of technological disruption is always present, we believe Illumina will be able to stay at the top of a high-growth (i.e., approximately 20%) industry. Our 2013 and 2014E EPS are $1.72 and $2.04, and our valuation range is $90-95, based on our DCF analysis (WACC = 8%; terminal NOPLAT growth = 2%), which represents 45x our 2014E PS and about 27x our 2014E EBITDA.”
Illumina closed on Monday at $79.58.
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