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Goldman Sachs Lowers Estimates on Illumina

NEW YORK (GenomeWeb News) – Goldman Sachs today lowered estimates for Illumina following last week's pre-announcement of third-quarter revenues that fall short of Wall Street expectations.

In a research note, analyst Isaac Ro lowered estimates for 2012 through 2014 "as we take a more cautious view on HiSeq placements … consumable pull-through, MiSeq placements, and array growth."

For the HiSeq, Ro lowered 2012 placement estimates to 225 from an earlier forecast of 300. He did not provide an estimate for MiSeq.

He also said that he expects Illumina to do additional share repurchases.

For 2011, Ro lowered estimated sales to $1.06 billion from an earlier estimate of $1.14 billion, and cut EPS estimates to $1.22 from $1.44. In 2012, he forecast $1.09 billion in sales, down from $1.29 billion, and reduced EPS estimates to $1.30 from $1.79.

For 2013, sales estimates were lowered to $1.24 billion from $1.47 billion, and EPS estimates were trimmed to $1.62 from $2.18. Ro cut sales estimates for 2014 to $1.40 billion from $1.69 billion, and EPS estimates to $1.97 from $2.55.

He also cut the 12-month price target on Illumina's stock to $28 from $47 based on lower estimates, a lower price-to-earnings ratio and Goldman Sachs' discounted cash flow for Illumina. The company's stock has a Neutral rating.

The action by the investment bank follows similar estimate reductions and downgrades by other banks, including Citi Investment Research & Analysis, last week as a result of Illumina's pre-announcement.