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Illumina Rises as Strong Sales Spur Analyst to Boost Revenue Target

The biotech company says it expects first-quarter sales to top $1 billion, sparking an analyst to boost his revenue forecast.

Illumina  (ILMN) - Get Illumina Inc. Report shares rose Tuesday after the biotech company said it expects first-quarter sales to top $1 billion thanks to "record" orders and revenue growth in its gene-sequencing and related businesses.

The outlook sparked one analyst to boost his revenue forecast.

Illumina said it expects fiscal first-quarter revenue of about $1.09 billion vs. revenue of $859 million in the first quarter of 2020. For fiscal 2021, Illumina said it now expects year-over-year revenue growth in a range of between 25% and 28% from fiscal 2020.

The revenue growth demonstrates "the solid recovery from the COVID-19 pandemic and the strength of our core business,” Illumina said in a statement, adding that most of its customers are now “… at or above pre-COVID activity levels."

Barclays analyst Luke Sergott raised his full-year revenue forecast for llumina. Sergott initiated coverage of Illumina at the end of March with an underweight rating and $325 price target, saying Illumina has "significant opportunity" and that its recent efforts could position it to catch some long-term trends.

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Still, Sergott cautioned Tuesday that while sales may ring in higher than expected in the short term, a key question is what should be expected from Illumina’s core business through the remainder of the year.

Meantime, the Federal Trade Commission is challenging Illumina's plan to acquire the stake it doesn't already own in Grail, a producer of a noninvasive biopsy test that screens for early signs of cancer. 

The FTC last week said it had filed an administrative complaint and authorized a federal court lawsuit to block the deal, which is valued at $7.1 billion. Illumina founded Grail in 2016 and owns 15% of the company.

Illumina’s subsequent stock-price drop, however, garnered the company a spot on TheStreet’s “buy the dip” list. TheStreet Quant Ratings rates Illumina as a buy with a rating score of B-.

At last check, shares of Illumina were up 8.66% at $417.84.