Analysts are weighing in on the gene-sequencing company Illumina, Inc. (NASDAQ:ILMN) and molecular diagnostics company EXACT Sciences Corporation (NASDAQ:EXAS), as shares of both companies are trading sharply lower today following recent announcements.
Illumina pre-announced a third-quarter miss and guided fourth-quarter below the Street’s thinking, sending the stock down 14.52% to $139.47. However, Cantor analyst Bryan Brokmeier recommends that investors use the current price volatility to build a position in the stock. The analyst reiterated a Buy rating on ILMN, with a price target of $225, which implies an upside of 65% from current levels.
Brokmeier wrote, “We expect shares to be down following last night’s lower-than-expected 3Q:15 revenue preannouncement, after already dropping 33% from the 52-week high set on July 20, 2015, creating a significant buying opportunity, in our view. However, the company reports that it has not seen any change in the competitive dynamics, consumable pull-through is robust, and demand for the HiSeq and HiSeq X remain strong. We continue to forecast double-digit growth for the next decade as next generation sequencing (NGS) becomes more routine in clinical markets, which we expect to be further amplified on the bottom line as the company expands operating margins through improved operating efficiencies, greater leverage of overhead, and moderate reductions in operating expenses.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Bryan Brokmeier has a total average return of 1.4% and a 48.7% success rate. Brokmeier has a -16.6% average return when recommending ILMN, and is ranked #1862 out of 3770 analysts.
Out of the 17 analysts polled by TipRanks, 11 rate Illumina stock a Buy, while 6 rate the stock a Hold. With a return potential of 62%, the stock’s consensus target price stands at $221.41.
EXACT Sciences Corporation
EXACT Sciences shares are tumbling 46% to $100, after the USPSTF issued its draft recommendation for colorectal screening guidelines and surprisingly did not include the company’s Cologuard in its “A” or “B” listed group of testing modalities.
Canaccord analyst Mark Massaro commented: “Our view is that the proposed guidelines are not favorable to EXAS, though we think EXAS will deploy any and all resources possible to influence the Task Force in the 30-day public comment period to “optimize” Cologuard’s position in the guidelines. With the stock set to open down 45% (traded to ~$10 after hours), the stock is set to price in a lack of inclusion; but, in our view, the unclear language on an “alternative screening test” and the likelihood of intense lobbying pressure from multiple stakeholders in our mind may land Cologuard into the final USPSTF guidelines after all.”
The analyst reiterated a Buy rating on Exact Sciences shares, with a price target of $26, which implies an upside of 146% from current levels.
According to TipRanks.com, analyst Mark Massaro has a total average return of -12.6% and a 24.7% success rate. Massaro has a -21.9% average return when recommending EXAS, and is ranked #3723 out of 3770 analysts.
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