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UBS, JP Morgan Downgrade Singular Genomics to Neutral

This article has been updated to correct the name of the UBS analyst.

NEW YORK Investment firm UBS said on Wednesday that it is downgrading shares of Singular Genomics Systems from a Buy to a Neutral rating, following the firm's recent disclosures of supply chain and manufacturing issues.

The investment bank also lowered its price target to $4.50 from $10 per share.

"Manufacturing issues have decreased visibility at a key stage in the G4 [sequencing instrument] launch," UBS Analyst John Sourbeer wrote in a note to investors. "Given the increased competition among emerging players (Element and Ultima) and delay in shipments, we believe the ramp in shipments is less clear over the near term and we look for greater color on backlog, pull through and actual revenue generation."

UBS follows JP Morgan, which downgraded Singular's stock to Neutral from Overweight last week and removed its price target. "Without a clear timeline to resolution [of the manufacturing challenges] and coupled with macro challenges, we see limited upside at this point," Analyst Julia Qin wrote in a note to investors.

Sourbeer noted that the firm has shipped one unit to an academic customer, landed an account with Exact Sciences, and successfully ran an early-access program. "There are several impressive features of the G4 including its speed, flexibility, and accuracy, and it is our opinion there is still an opportunity to gain share in the short-read NGS market. However, we see a slower ramp over the near term and we are revising our 2023 EPS estimate by 58 percent" from $1.01 to $.44.

In Wednesday morning trading on the Nasdaq, shares of Singular were down 12 percent at $3.55.

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