Illumina Stock Drops Lower After Slew of Bear Notes

The equity is already down 20% this year

Digital Content Manager
Sep 22, 2020 at 12:30 PM
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The shares of Illumina, Inc. (NASDAQ: ILMN) are down 1.6% at $265.72 at last check, after J.P. Morgan Securities downgraded the biotechnology company to "neutral" from "overweight," and both Stifel and UBS, respectively, slashed their ratings to "hold" and "neutral" from "buy." The stock also received no less than six price target cuts, including one from UBS to $285 from $390. The analyst in coverage expressed concerns over Illumina's plans to acquire cancer diagnostics firm Grail for $8 billion, noting the revenue trajectory is uncertain.

On the charts, the equity staged an impressive recovery from its mid-March, three-year lows near the $196 mark, more than doubling to reach an all-time-high of $404.20 on August 5. However, shares are now plummeting once again, with three consecutive bear gaps over the last couple of weeks knocking the stock far below the once supportive 20-day moving average. Year-to-date, Illumina stock is down 20.2%.


Analysts were already mostly pessimistic towards ILMN coming into today, with eight of the 14 in coverage sporting a tepid "hold" or worse rating, and the remaining six carrying a "strong buy." Meanwhile, the 12-month consensus target price of $303.73 is a hefty 14.7% premium to current levels, meaning more price target cuts could be on the horizon for Illumina stock.

That bearish sentiment is echoed in the options pits, where puts are popular. ILMN sports a 10-day put/call volume ratio of 1.43 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 90th percentile of its annual range. This suggests a healthier-than-usual appetite for bearish bets of late. 

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