Skip to main content

Market Overview

Market, Policy Trends Are Shifting In Illumina's Favor, Morgan Stanley Says In Upgrade

Market, Policy Trends Are Shifting In Illumina's Favor, Morgan Stanley Says In Upgrade

The bearish case for Illumina, Inc. (NASDAQ: ILMN) has come to an end for four key reasons, according to Morgan Stanley.

The Analyst

Analyst Steve Beuchaw upgraded Illumina from Underweight to Equal-weight with a price target lifted from $210 to $320.

The Thesis

Illumina stands to benefit from multiple market developments and policy changes, Beuchaw said in the upgrade note. (See the analyst's track record here.) 

They are:

  • The success of DNA-driven drug administration, which prompted the FDA's support of DNA-based companion cancer diagnostics and expansion of Medicare reimbursements.
  • Government funding for DNA analysis could expand globally.
  • Consumer interest in DNA-derived applications.
  • A global mix shift toward genomic research.

Morgan Stanley's prior bear thesis on Illumina now appears "flawed," but a bullish stance on the stock can't yet be made for the following reasons, Beuchaw said:

  • The stock's more than 50-percent return since the start of 2018 implies it is trading at a 17-percent premium to its 10-year historical multiple.
  • Expectations for NovaSeq to see a growth deceleration in the third year of its cycle in 2019.
  • Any timeline for favorable reimbursement changes are difficult to model.
  • Competition could intensify.

Illumina's longer-term market opportunity is "undeniable," but its valuation is stretched at current levels, according to Morgan Stanley. 

Price Action

Illumina shares were trading up 1.75 percent at $338.19 at the time of publication Tuesday. 

Related Links:

Baird Weighs In On Illumina's Guidance, NovaSeq Platform

Illumina Reported Its Fastest Top-line Growth Since 2015

Photo courtesy of Illumina. 

Latest Ratings for ILMN

Apr 2021Canaccord GenuityMaintainsBuy
Apr 2021Wells FargoMaintainsUnderweight
Apr 2021Wells FargoMaintainsUnderweight

View More Analyst Ratings for ILMN
View the Latest Analyst Ratings


Related Articles (ILMN)

View Comments and Join the Discussion!

Posted-In: DNA Morgan Stanley NovaSeq Steve BeuchawAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

BBSIRoth CapitalMaintains88.0
TRTXRaymond JamesMaintains15.5
IPMorgan StanleyMaintains52.0
TTGTRaymond JamesMaintains100.0
HUBSMorgan StanleyMaintains605.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at