In a report released yesterday, Michael Ryskin from Bank of America Securities maintained a Sell rating on Illumina (ILMN – Research Report), with a price target of $70.00.
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Michael Ryskin has given his Sell rating due to a combination of factors surrounding Illumina’s recent acquisition of SomaLogic. While the acquisition aligns strategically with Illumina’s efforts to diversify beyond its core next-generation sequencing market, the immediate financial impact is expected to be negative. The transaction is anticipated to dilute earnings per share by approximately 1% to 2% in the near term and is not expected to be accretive until 2028 or later.
Additionally, the proteomics market, where SomaLogic operates, is still in its early stages and faces significant competition from established players like Olink. Despite Illumina’s belief in SomaLogic’s potential due to its scalable oligo-based technology, there remains uncertainty due to market conditions, including potential funding cuts from the National Institutes of Health. These factors contribute to the cautious outlook and the decision to maintain an Underperform rating with a price objective below the current market price.
ILMN’s price has also changed moderately for the past six months – from $134.990 to $90.610, which is a -32.88% drop .