Canaccord sees competitive headwinds but still bullish stance on 10X Genomics stock

On Tuesday, Canaccord Genuity adjusted its outlook on 10X Genomics (NASDAQ:TXG) stock, reducing the price target to $32 from the previous $50, while still endorsing the stock with a Buy rating. The revision comes as a response to updated revenue projections for the company's single-cell business, particularly its Chromium product line.

The price target adjustment reflects concerns stemming from recent developments in the single-cell market. Notably, the acquisition of Fluent (NASDAQ:FLNT) BioSciences by industry giant Illumina (NASDAQ:ILMN) in early July has been perceived as a potential challenge for 10X Genomics, possibly creating competitive headwinds for the company's single-cell operations. The news of the acquisition had already put some pressure on 10X Genomics' share value earlier in the month.

Despite the perceived threats, Canaccord Genuity believes that the immediate effects on 10X Genomics will be manageable. The firm suggests that 10X Genomics possesses strategies to counteract any negative impacts from the recent market changes. The lowered price target, according to Canaccord Genuity, still points to a promising upside for investors, indicating confidence in the stock's value proposition.

The firm's stance is based on insights gathered from industry insiders, including executives from companies specializing in single-cell analysis and spatial biology. These discussions have informed Canaccord's forecasts and contributed to the decision to maintain a positive rating on 10X Genomics.

In summary, while acknowledging the hurdles posed by Illumina's strategic move in the single-cell space, Canaccord Genuity remains optimistic about 10X Genomics' prospects. The investment firm's revised price target suggests that, despite a more conservative revenue outlook for the single-cell business, the company's shares are still seen as having attractive potential for growth.

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