Goldman Sachs Maintains Buy Rating On Illumina

According to Goldman Sachs, Illumina ILMN reported 2Q results that beat expectations (revs/EPS of $287mn/$0.38 vs. consensus $282mn/$0.36) but the magnitude of the revenue beat declined sequentially (2% vs. 8% in 1Q2011) and management took a cautious tone on the academic funding outlook. Goldman Sachs said that, after speaking with management, it came away with the view that the company is taking a conservative approach to the funding outlook and that pricing remains robust. “We are lowering our 12-mo PT to $76 from $83 on revised estimates and a lower P/E multiple of 35x from 38x previously (50% weight) and DCF (50% weight). This implies 1.4x our long-term EPS growth rate of 27% which is a slight premium to the peer group of 1.2x which we think is warranted.” Illumina closed yesterday at $69.65.