Cantor Initiates Buy on Illumina, Inc.; Sees 32% Upside for the Stock
In a research report released yesterday, Cantor analyst Bryan Brokmeier initiated coverage on shares of Illumina, Inc. (NASDAQ:ILMN) with a Buy rating and a price target of $265, which implies an upside of 32% from current levels.
Brokmeier wrote, “ILMN has the highest gross margins in the industry (2016 estimate of 72%, including stock comp, compared to a peer average of 52%), providing ILMN with the flexibility to invest in R&D and sales and marketing. If the company’s operating expenses as a percentage of total revenues of 40% were more in line with the peer average of 32%, earnings would be ~$1.00 higher.”
Furthermore, “ILMN estimates its oncology market opportunity to be $12B of its $20B total market opportunity and yet today, sales to oncology customers are just $450-550M, or 20-24%, of the company’s sales. The company is on track to release an onco panel as an RUO by the end of 3Q:15, which we expect to accelerate the company’s 30% oncology growth rate and take market share away from TMO’s successful Ion AmpliSeq Panels.”
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 -3.8% and a 44.4% success rate. Brokmeier has a -1.0% average return when recommending ILMN, and is ranked #3096 out of 3734 analysts.
Out of the 18 analysts polled by TipRanks, 14 rate Illumina stock a Buy, while 4 rate the stock a Hold. With a return potential of 7%, the stock’s consensus target price stands at $214.77.