Grail spinoff should return focus to Illumina core business, says Canaccord

Canaccord reiterates a Hold rating and $130 price target on Illumina (ILMN) shares after the company disclosed that its board of directors approved the spin-off of Grail and will distribute at least 85.5% of the shares of Grail common stock to Illumina shareholders, using a ratio of one share of Grail stock for every six shares of Illumina stock. The stock dividend distribution is expected to be effective June 24, and Grail will begin standard trading on Nasdaq on June 25 under the ticker “GRAL,” the firm noted. The spinoff will significantly improve the company’s cash generation and lower its risk profile, says the firm, which believes the updates related to the separation are positive, if “not surprising.” The firm remains on the sidelines until the company can execute on its strategic objectives and improve its core financial performance, the analyst added.