Illumina downgraded to Sell from Neutral at Citi

Citi analyst Patrick Donnelly downgraded Illumina to Sell from Neutral with a price target of $180, down from $200. Going into 2023, the analyst views sentiment across the life science tools space as "relatively mixed following several years of outperformance." He believes investors are content in the near-term to own more instrument-heavy tools companies given visibility provided by elevated backlogs. Donnelly sees less interest in the "usual large cap suspects" given concerns around the near-term outlook for bioprocessing growth and potential downside risk to 2023 numbers, while still carrying higher multiples. Going into next year, the analyst is more constructive on companies with improved 2023 setups and numbers "appropriately set for the year with more compelling current valuations," such as Avantor (AVTR), his top pick, Bio-Techne (BIO), and PerkinElmer, (PKI). In diagnostics and contract research organizations, he names QuidelOrtho (QDEL) and Icon (ICLR) his respective top picks for 2023. For Illumina, Donnelly says "two long held tenets of the bull thesis," consistent consumable stream and healthy margin profile/earnings power, are "continuing to deteriorate."