Goldman Sachs Comments On Illumina, Updates Its Model

Goldman Sachs is adjusting its estimates on Illumina Inc. ILMN to reflect its updated view on quarterly revenue pacing, recent financing activities, and corresponding share repurchase. Its 2011-2013 EPS estimates go to $1.48, $2.03, and $2.62 from $1.48, $2.00, and $2.58. Goldman continues to believe expanded HiSeq production will facilitate sequential revenue growth in 1Q and 2Q with a likely 3Q abatement as the existing backlog is worked down. It also anticipates a slight 2Q slowdown in the array franchise ahead of new product launches. Goldman anticipates no material impact, as ILMN has said key component supply is sufficient through 1H2011. Checks also suggest ILMN's optics supplier will not face meaningful production halts. Risks to the target price include execution risk, development of future products, competitive pressure from new technologies, and a decline in genomics funding. Goldman Sachs has a Buy rating and $81 PT on ILMN ILMN is trading lower at $70