Illumina (ticker: ILMN), a leading gene-sequencing company, has seen a decline in its stock value due to a hesitant consumer market and increased competition. In their recent announcement, Illumina revised their full-year earnings outlook, projecting earnings between 75 cents to 90 cents per share and a modest revenue growth of approximately 1%. This is a significant decrease from their previous guidance of earnings between $1.25 to $1.50 per share and revenue growth of 7% to 10%.
According to Charles Dadswell, the interim Chief Executive, the cautiousness among customers has impacted purchasing behaviors. In particular, the economic recovery in China has been slower, and there is heightened competition in the region compared to the Americas and Europe.
Despite the challenges, Illumina did report positive second-quarter earnings of 32 cents per share and revenue of $1.18 billion. This exceeded analysts’ expectations of only 2 cents per share and revenue of $1.16 billion.
Vijay Kumar, an analyst from Evercore ISI, highlighted that many tools companies are facing similar spending environments but believes that Illumina deserves the benefit of the doubt. He maintained his Outperform rating and a price target of $240 for the company’s stock.
However, not all analysts share this optimistic perspective. Patrick Donnelly, an analyst from Citi, reduced his price target for Illumina’s stock to $150 from $180 and maintained a Sell rating due to concerns about consumables growth and margins.
The sentiment among analysts is divided. Among the 20 analysts surveyed by FactSet, eight rate the stock as a Buy, nine as a Hold, and three as a Sell.
Illumina’s stock has experienced a decline of 4.9% in premarket trading on Thursday, reaching $175.38 per share. Overall, the stock has dropped 8.8% in 2023.
