Baird Weighs In On Illumina's Guidance, NovaSeq Platform

On Monday, Illumina, Inc. ILMN announced preliminary Q4 results, while issuing the 2017 guidance and announcing the launch of its new sequencing platform, NovaSeq.

Baird’s Catherine W. Ramsey maintains a Neutral rating on the company, while raising the price target from $147 to $153.

Preliminary Results And Guidance

Illumina pre-announced its Q4 revenue at $619 million, ahead of the estimate and the consensus, representing 5 percent year-on-year growth.

Sequential consumables rose 23 percent to $1.3 billion, driven by an expanding installed based and higher HiSeq X and NextSeq utilization, while array shipments achieved a new record of almost $400 million.

For 2017, the company guided to 10–12 percent revenue growth, implying revenue of $2.64-$2.69 billion, marginally ahead of expectations. The non-GAAP EPS guidance was $3.60–$3.70, in line with the consensus but below the estimate.

NovaSeq Launch

“ILMN believes NovaSeq’s ease of use, throughput, and low cost/sample will open the door to new applications for sequencing and sees a pathway to a $100 genome with NovaSeq’s architecture,” Ramsey mentioned.

Management expects NovaSeq to trigger a multi-year replacement cycle within the HiSeq installed base, given that the platform claims improved price and higher throughput.

“We believe NovaSeq should help reinvigorate instrument placements, as HiSeq customers upgrade to this newer platform, but remained sidelined at this point until we gain greater comfort in the long-term growth trajectory,” Ramsey added.

At last check, shares of Illumina were up 15.44 percent at $163.39.