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On Monday, Piper Sandler confirmed its Overweight rating on Illumina shares (NASDAQ:ILMN), maintaining a $185.00 price target. The research firm’s analyst highlighted a challenging near-term outlook due to funding and geopolitical issues but expressed a positive outlook for the years 2026/2027. Currently trading at $84.06, the stock sits well below its 52-week high of $170.09, though InvestingPro analysis suggests the stock is currently undervalued.
The analyst’s commentary focused on the current state of research funding and competition, following discussions with key opinion leaders in sequencing. Concerns were raised about short-term funding, particularly from academic sources. The analyst also noted potential impacts from National Institutes of Health (NIH) funding, tariffs, and the market in China. These concerns align with InvestingPro data showing 14 analysts have recently revised their earnings expectations downward, though net income is expected to grow this year.
Despite these near-term challenges, Piper Sandler remains optimistic about Illumina’s competitive position. The firm observed that Illumina has largely transitioned to its NovaSeq X platform, which is expected to lead to a decrease in pricing. This, in turn, could be balanced by an anticipated increase in volume growth. The company maintains a strong gross profit margin of 68.6% and operates with a moderate debt level, with a debt-to-equity ratio of 0.4. Want deeper insights? InvestingPro offers exclusive access to over 30 additional key metrics and financial health scores for Illumina.
The analyst’s reiteration of the Overweight rating suggests confidence in Illumina’s ability to navigate the current headwinds. The maintained price target of $185.00 reflects this positive stance, indicating the firm’s belief in Illumina’s potential for future growth despite the present difficulties.
Illumina, a leading company in sequencing technology, is expected to leverage its platform advancements to maintain its market position. Piper Sandler’s outlook suggests that while short-term obstacles may exist, the company’s long-term prospects remain favorable.
In other recent news, Illumina Inc. has launched PromoterAI, an AI algorithm aimed at improving the diagnosis of rare diseases by detecting genetic variants in noncoding regions of the human genome. This development is part of Illumina’s ongoing efforts to enhance genomic diagnostics, following previous AI tools like SpliceAI and PrimateAI-3D. Additionally, Illumina has expanded its oncology portfolio with the FDA-approved TruSight Oncology Comprehensive test, which is now covered by Medicare and most commercial health plans. The test matches cancer patients with targeted therapies and is the first FDA-approved comprehensive genomic profiling IVD kit.
In the realm of software advancements, Illumina released DRAGEN version 4.4, which improves germline structural variant calling accuracy by 30% and includes new oncology applications. Meanwhile, Stifel analysts have maintained a Buy rating on Illumina stock, citing robust sequencing activity despite a slowdown in academic spending. On the other hand, Canaccord Genuity has lowered its price target for Illumina stock to $87, maintaining a Hold rating due to uncertainties surrounding Illumina’s updated 2025 guidance and challenges such as tariffs and a ban on importing sequencers into China. Despite these hurdles, Illumina remains focused on achieving its revenue growth and margin expansion targets by 2027, excluding the Chinese market.
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