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Why Illumina (ILMN) Stock Is Down Today

ⓘ This article is third-party content and does not represent the views of this site. We make no guarantees regarding its accuracy or completeness.

ILMN Cover Image

What Happened?

Shares of genomics company Illumina (NASDAQ: ILMN) fell 1.9% in the afternoon session after Swiss drugmaker Roche launched a next-generation gene sequencing machine, taking aim at the company's market dominance. Roche's new "Axelios" machine is priced at $750,000, undercutting Illumina’s competing NovaSeq X machines, which list for between $985,000 and $1.25 million. 

The move is a significant attempt by the Swiss diagnostics group to challenge Illumina's strong position in the genetic-testing technology market, where it holds an estimated 70% share. This isn't Roche's first challenge; the company failed in a $6.8 billion hostile takeover bid for Illumina over a decade ago. Analysts believe Roche faces a long battle and expect a gradual push for market share rather than a rapid disruption.

The shares were trading at $177.45, down 2% from the previous close.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Illumina? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Illumina’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 6 days ago when the stock gained 6.6% on the news that it appointed a high-profile Eli Lilly executive to its board and a price target increase from Barclays. Illumina appointed Daniel M. Skovronsky, the Chief Scientific and Product Officer of Eli Lilly, to its board of directors. 

The move was viewed positively, as his expertise is expected to help the company's innovation and business development efforts. Separately, Barclays analyst Luke Sergott raised the firm's price target on Illumina to $145 from $122. While the analyst kept an Underweight rating on the shares, the note mentioned that life science and diagnostic tools are “gaining favor among healthcare subsectors,” and the firm expects in-line to modest beats in quarterly results for the group.

Illumina is up 32.1% since the beginning of the year, and at $177.45 per share, it has set a new 52-week high. Despite the year-to-date gain, investors who bought $1,000 worth of Illumina’s shares 5 years ago would now be looking at only $374.99.

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