Citigroup Downgrades Illumina to Sell from Neutral with $80 PT.

Citigroup Downgrades Illumina to Sell from Neutral with $80 PT.

Citigroup has downgraded Illumina (NASDAQ: ILMN) from Neutral to Sell, reducing its price target to $80 from $85 [1]. This move comes despite expectations for in-line second-quarter results, as Citi expresses concerns over Illumina's second-half outlook [1]. The gene sequencing company, currently valued at approximately $15.7 billion, has seen its stock trade at $98.87, significantly below its 52-week high of $174.49 [1].

The downgrade is attributed to challenges in Illumina’s consumables ramp due to a softer academic backdrop and conditions in China, with pricing ramp also under scrutiny [1]. Citi warned of potential stock risk if Illumina cuts its guidance, which would mark the third earnings per share guidance reduction this year [1]. Alternatively, maintaining current guidance could also present risk to the stock as second-half performance concerns would remain unaddressed [1].

In other recent news, Standard BioTools has announced the sale of its SomaLogic business to Illumina for up to $425 million, comprising $350 million in upfront cash and up to $75 million in milestone payments [1]. This transaction is part of Standard BioTools’ strategy to streamline operations and achieve adjusted EBITDA break-even, with expectations of having at least $550 million in cash post-closure [1]. The deal, which includes royalties on SOMAmer-based products, is anticipated to close in the first half of 2026, pending regulatory approvals [1]. Illumina sees this acquisition as a way to enhance its footprint in the proteomics market, with plans for profitability by 2027 [1].

Meanwhile, Bernstein has issued a more optimistic outlook on the Life Science Tools & Diagnostics sector, suggesting a potential recovery after recent stock declines [1]. The firm highlights possible positive regulatory developments and emerging market growth as factors that could improve sector performance [1]. Bernstein, however, remains cautious, indicating that more consistent financial results are needed to reassure investors fully [1].

References:
[1] https://www.investing.com/news/analyst-ratings/citi-downgrades-illumina-stock-rating-to-sell-on-concerns-over-2h-outlook-93CH-4127720
[2] https://www.tipranks.com/news/the-fly/illumina-downgraded-to-sell-from-neutral-at-citi-thefly
[3] https://www.nasdaq.com/articles/where-illumina-stands-analysts