Illumina plummets after cutting revenue expectations and getting a downgrade from Bank of America
- Shares of Illumina plummeted in early trading on Friday after issuing a disappointing revision to its full-year guidance and getting a rating downgrade from Bank of America Merrill Lynch.
- The bank cut its price target by more than 18% and gave the stock its first "underperform" rating since March.
- The genetics company said it expects to report second-quarter revenue of approximately $835 million, well below analysts' $887.9 consensus estimate.
- Watch Illumina trade live here.
The news was followed by a Friday-morning downgrade from Bank of America Merrill Lynch, which gave the genetics company its first "underperform" rating since March. The bank also dropped the stock's price target from to $290 from $355, implying a 20% decrease from Thursday's $363.66 close. Illumina's average price target is $341.57.The company said Thursday it expects to report a second quarter revenue of roughly $835 million, lower than analysts' consensus projection of $887.9 million, according to Sentieo estimates.
Illumina also slashed its full-year outlook and said it expects revenue to grow by about 6%, far below its previous estimation for about 13% to 14% revenue growth in 2019.
"We are obviously disappointed with our second quarter financial results," Francis deSouza, president and CEO of Illumina, said in a statement. "Our preliminary analysis suggests that these challenges are transitory and do not reflect a macro change to the fundamentals of our business"
He continued: "Despite our shortfall this quarter, we remain as enthusiastic about the long-term growth prospects for our markets as we have ever been, and are committed to setting the industry's bar for consistency and execution in the dynamic and rapidly growing world of genomics."
Illumina will announce its second-quarter results on July 29.