On Tuesday, Canaccord Genuity maintained a Hold rating on Illumina stock (NASDAQ:ILMN), currently trading at $87.66 and down 34% year-to-date, with a steady price target of $115.00, as significant changes were announced in the company’s board composition. According to InvestingPro data, the stock has seen analyst price targets ranging from $90 to $190. Illumina revealed that Keith Meister, Managing Partner at Corvex Management LP, will join the board effective March 28, 2025. Concurrently, Stephen MacMillan, who served as Chairman, President, and CEO of Hologic (NASDAQ:HOLX), has resigned from his role as Chair of Illumina’s board. In his place, Scott Gottlieb, M.D., Partner at New Enterprise Associates, has been elected as the new Chair.
The changes come in the wake of interest from multiple activist and hostile investors, including Carl Icahn and Roche, who have indicated potential to enhance Illumina’s performance. While the company generates substantial revenue of $4.37 billion, InvestingPro analysis reveals it hasn’t been profitable over the last twelve months, though analysts expect profitability to return this year. Keith Meister, who has a history of shareholder activism, particularly with non-healthcare companies, previously held the CEO position at Icahn Enterprises (NASDAQ:IEP).
Canaccord Genuity’s analyst acknowledged the progress made by Illumina under the leadership of CEO Jacob Thaysen, especially in the company’s efforts to expand into different omics areas and deepen clinical penetration. The company maintains a moderate debt level with a debt-to-equity ratio of 1.1 and healthy liquidity with a current ratio of 1.78. However, the firm has decided to maintain its current position on Illumina’s stock until the company demonstrates stronger financial results. For deeper insights into Illumina’s financial health and additional ProTips, investors can access the comprehensive research report available on InvestingPro.
The analyst expressed a constructive view on the possibility that shareholder activism could lead to further operational improvements within Illumina. Nevertheless, Canaccord Genuity prefers to wait for tangible evidence of enhanced financial performance before altering its stance on the stock.
In other recent news, Illumina has announced its fiscal year 2025 non-GAAP diluted earnings per share (EPS) guidance of approximately $4.50. This outlook comes amid challenges, including the recent export restrictions from the China Ministry of Commerce, which have barred Illumina from selling its sequencing instruments in China. In response, the company is implementing a cost reduction program valued at around $100 million to mitigate potential revenue losses. Additionally, Illumina plans to focus on high-single-digit revenue growth by 2027, leveraging its portfolio of multiomic technologies.
Changes in Illumina’s leadership have also been reported, with Keith Meister joining the board and Scott Gottlieb becoming the new chairman. Meanwhile, Chief Information Officer Carissa Rollins is set to retire in April 2025, marking a significant transition in the executive team. Analyst firms have adjusted their outlooks, with RBC Capital Markets lowering Illumina’s stock price target to $128 while maintaining an Outperform rating. Canaccord Genuity has also reduced its price target to $115, citing uncertainties related to the China market.
Despite these challenges, Illumina remains committed to its strategic initiatives, including expanding its genomics and data analysis technologies. The company continues to adapt to market conditions, aiming to achieve its earnings objectives and maintain its position in the industry.
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