The news of the potential shortfall in the third-quarter top line and a possible miss in the fourth quarter forced sell side analysts to make a beeline to the stock, as they analyzed the implication of the news and its impact on the stock.
Citi's Déjà Vu: Downgrades To Neutral
Highlighting the fact that the potential shortfall in the upcoming fourth quarter will mark the fourth miss in six quarters, Citi said confidence in the near term is simply not there at this point. The firm downgraded the shares to Neutral from Buy, with the price target cut to $140 from $190.
Citi expects the selloff to continue tomorrow and raised the specter of a drop to the $110–$120 area.
Wells Fargo Sees Multiple Contraction Amid Foray Into Nascent, Challenging Clinical Market
Wells Fargo expressed frustration over the company offering different narratives every quarter for the setbacks. The firm sees the problems as growing pains of the company as it transitions from a mature academic research market to a relatively nascent and challenging clinical market.
Accordingly, the firm sees multiple contraction. Consequently, Wells Fargo lowered its 2016 and 2017 earnings per share estimates, while also trimming its valuation range to $135–$140 from $145–$155.
Cantor Sees Drag From HiSeq; Stays At Hold
Cantor recommends investors to stay on the sidelines. The firm termed the weak HiSeq placements are particularly concerning, as the HiSeq is the greatest driver of consumable revenue pull-through. Accordingly, the firm seeks a reacceleration, for it to become more positive with its view of shares.
The firm lowered its price target on the shares of Illumina to $155 from $165.
Illumina Experiencing Structurally Lower Growth Outlook –BTIG
BTIG is of the view that the company may be experiencing a structurally lower growth outlook, given the tougher competition, and less differentiation between products or product cycles. The firm remains at Neutral on the company.
Poised For Slowest Growth In Over 4 Years –Barclays
Analyst Jack Meehan from Barclays expects fourth-quarter revenues to be up 3.7 percent year-over-year, given the 3.3 percent revenue miss for the third quarter and uncertainty surrounding a large number of binary orders in the fourth quarter. This, according to the firm, is the lowest growth rate since the second quarter of 2012.
Accordingly, Barclays lowered its forecast and price target on the shares of the company to $142 from $150. However, the firm maintained its Equal-Weight rating.
2 Others
- Piper Jaffray believes the selloff in Illumina's shares should create s buying opportunity.
- Janney Capital downgraded the shares of Illumina to Sell from Neutral.
At the time of writing, shares of Illumina were down 25.07 percent at $138.51.
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