Skip to main content
Premium Trial:

Request an Annual Quote

UBS Downgrades Illumina to Neutral; Expresses Doubts About Grail Deal

NEW YORK – Investment firm UBS said on Monday that it is downgrading Illumina's stock from a 'buy' to a 'neutral' rating, following Illumina's announcement that it plans to acquire cancer diagnostics firm Grail for $8 billion in cash and stock.

UBS also lowered its price target for Illumina's stock to $285 from $390 per share.

In a note to investors, UBS analyst Dan Brennan wrote that "while the pan-cancer screening opportunity Grail's lead test (Galleri) addresses is significant, the revenue trajectory is uncertain and guidance calls for material [earnings per share] dilution given Grail's operating loss and associated spending ramp."

He noted that Illumina's stock has declined about 23 percent since rumors about the pending deal were reported, adding that "given the material shift in strategy this deal signifies, combined with dilution and limited visibility, we see the risk reward as more balanced and downgrade to Neutral."

JP Morgan also downgraded Illumina's stock on Monday and several other analysts cut their price targets for the company.

In Tuesday morning trading on the Nasdaq, Illumina's stock was down more than 2 percent at $263.59 per share.

The Scan

Support for Moderna Booster

An FDA advisory committee supports authorizing a booster for Moderna's SARS-CoV-2 vaccine, CNN reports.

Testing at UK Lab Suspended

SARS-CoV-2 testing at a UK lab has been suspended following a number of false negative results.

J&J CSO to Step Down

The Wall Street Journal reports that Paul Stoffels will be stepping down as chief scientific officer at Johnson & Johnson by the end of the year.

Science Papers Present Proteo-Genomic Map of Human Health, Brain Tumor Target, Tool to Infer CNVs

In Science this week: gene-protein-disease map, epigenomic and transcriptomic approach highlights potential therapeutic target for gliomas, and more