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Citigroup Upgrades Life Technologies' Stock on Dip

NEW YORK (GenomeWeb News) – Citigroup upgraded Life Technologies to Buy today following last week's contraction in the company's stock price.

Following Oxford Nanopore's presentation at the Advances in Genome Biology and Technology meeting in Marco Island, Fla., last week, the stocks of next-generation sequencing firms, including Life Tech, dipped amid investor concerns that Oxford Nanopore's technology could eventually take market share from instruments already on the market.

Life Tech shares finished down 9 percent on Friday after Oxford Nanopore's presentation.

In a research note, though, analyst Amit Bhalla noted that while he is also excited about Oxford Nanopore's technology — embodied in the GridIon and MinIon platforms — "nothing in the sequencing market is a 'slam dunk' especially at the early stages."

The drop in Life Tech's stock, meanwhile, has created a buy opportunity as the market is now "fully discounting" the firm's next-generation platform, the Ion Proton, which like Oxford Nanopore's two platforms is slated for a second-half 2012 launch, Bhalla said.

"We've indicated in recent reports that we have been waiting for a more attractive entry point to get more bullish and Friday's drop" of more than $700 million in market capitalization "has created a positive risk/reward trade-off in our view," he said.

He is upgrading Life Tech from Neutral and raising the price target on the company's stock to $56 per share from an earlier target of $52. Bhalla maintained earnings-per-share estimates for full-year 2012 at $3.98.

In late afternoon trading on Nasdaq, Life Tech shares were up a fraction of 1 percent at $46.33.

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