On Wednesday, Baird maintained a Neutral rating on Illumina (NASDAQ:ILMN) shares but raised the price target to $139.00, up from the previous target of $124.00. This adjustment reflects updates to Baird's financial model following Illumina's third-quarter report, which was released earlier in the week.
Illumina's recent quarterly update revealed that its third-quarter revenue was roughly in line with consensus estimates. Moreover, the company experienced an upside in both margins and earnings per share (EPS).
Despite these positive outcomes, Illumina's management has revised its full-year 2024 revenue growth outlook downward. This revision is attributed to the difficult macroeconomic environment, which is having an adverse impact on the performance of the company's instruments.
The new price target represents a $15.00 increase and is based on the latest financial data from Illumina. The company's third-quarter performance, including the reported revenue and EPS, has been taken into account by Baird in setting the new target.
Illumina's management has expressed that the challenging macroeconomic conditions are expected to continue affecting the company's instrument sales, leading to the lowered revenue growth guidance for 2024.
The revised price target by Baird comes after a detailed review of the company's third-quarter financials and the subsequent guidance update provided by Illumina's management. The firm's decision to maintain a Neutral rating indicates that, while acknowledging the company's recent performance, Baird remains cautious about Illumina's growth prospects amid the current economic challenges.
In other recent news, Illumina Inc (NASDAQ:ILMN). reported a 2% year-over-year decrease in third-quarter revenue. Despite this, the company raised its guidance for both operating margin and earnings per share, with earnings per share notably surpassing expectations by 30%. The company's transition from the NovaSeq 6000 to the newer NovaSeq X model has been progressing positively, contributing to an increase in high-throughput consumables revenue.
TD Cowen, Canaccord Genuity, Piper Sandler, Barclays (LON:BARC), and Citi have all adjusted their price targets for Illumina shares, reflecting a generally positive outlook on the company's growth and operational performance.
TD Cowen maintained a Buy rating, raising the price target to $177, while Canaccord Genuity maintained a Hold rating and increased the price target to $145. Piper Sandler reaffirmed its Overweight rating with a price target of $195, Barclays maintained an Equal-weight rating and increased the price target to $145, and Citi maintained a Buy rating and increased the price target to $190.
In addition to these developments, Illumina announced the acquisition of Fluent (NASDAQ:FLNT) BioSciences and a share repurchase, indicating a strong financial position. Despite a reduction in its revenue outlook for 2024, Illumina anticipates a return to growth in 2025. These recent developments highlight the company's focus on operational excellence and innovation.
InvestingPro Insights
Recent data from InvestingPro provides additional context to Illumina's financial situation and market performance. Despite the challenging macroeconomic environment noted in the article, Illumina has shown a strong return over the last three months, with a price total return of 33.17% for the same period. This aligns with the company's overall positive performance in the stock market, as evidenced by a 41.31% price total return over the past year.
An InvestingPro Tip suggests that Illumina's net income is expected to grow this year, which could be a positive sign for investors despite the company's downward revision of its full-year 2024 revenue growth outlook. Additionally, another InvestingPro Tip indicates that Illumina operates with a moderate level of debt, which may provide some financial flexibility as it navigates the current economic challenges.
It's worth noting that InvestingPro offers 7 additional tips for Illumina, providing a more comprehensive analysis for investors interested in deeper insights into the company's financial health and market position.
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