NEW YORK – Evercore ISI on Wednesday upgraded its rating for Illumina to Outperform, with a new price target of $250, based on expectations of an upcoming new product cycle.
"Illumina is coming out of a multiyear underperformance … and is about to enter a new product cycle," analyst Vijay Kumar wrote in a note to investors. "While new product cycles have historically been a catalyst, the current situation has been complicated by [the] Grail situation, macroeconomic backdrop/competition, and fiscal year 2023 [guidance] risks."
Kumar added that he believes it likely that the European Commission will deny Illumina's appeal of a finding that acquiring Grail would lessen competition in the fledgling multi-cancer early detection testing market. "In order to prevent a disorderly spin, we believe Illumina is preparing for strategic alternatives," he noted.
The upgrade comes right before the inaugural Illumina Genomics Forum, where the company has said it will provide technical updates on a new sequencing-by-synthesis chemistry, and an investor day early next month.
"We think next week's analyst day could mark a turn in how investors view the asset," Kumar added.
In Wednesday morning trading on the Nasdaq, shares of Illumina were up about 5 percent to $195.66.