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Illumina Surges After Strong Earnings, Price Target Upgrades

Illumina stock traded higher Friday on price target upgrades by analysts after the gene sequencing firm reported better-than-expected fourth-quarter sales and revenue.

Shares of Illumina  (ILMN)  jumped over 20% Friday after the sequencing firm reported fourth-quarter earnings that topped estimates which prompted a string of analyst upgrades.

Shares of the San Diego company spiked 20.78% to $545 at the last check. The stock surged 16%, the most since Jan. 2017, Bloomberg reported.

Analysts at Piper Sandler and Evercore both raised its price targets on the stock buoyed by the results.

Illumina posted fourth-quarter adjusted earnings of $1.22 a share on revenue of $953 million, compared to analyst estimates of earnings of $1.1 a share and revenue of $900.9 million.

Revenue remained flat at $953 million. Free cash flow increased to $891 million from $842 million in the year-ago period.

"We also had record orders in the quarter, including record sequencing instrument orders and the second-highest quarter for NovaSeq instrument orders," said Chief Executive Francis deSouza, in a statement. "Our business delivered strong sequential growth in the second half of 2020 and we expect continued recovery from the pandemic in 2021.”

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Illumina said its expected revenue for fiscal 2021 to grow between $3.79 billion-$3.89 billion, indicating a surge of 17-20% compared with the year-ago period. 

Piper Sandler's analyst Steven Mah said that the results and forecast showed a rebound in strength for gene sequencing with an upside to 2021 numbers as the recovery has been stronger than expected.

Mah raised his target on Illumina to a Street-high of $510 from $415,

"COVID-19 sequencing to identify new strain variants could be a potential source of upside with clinical testing an area of continued growth, " he added.

Evercore’s analyst Vijay Kumar also raised his price target on Illumina to $350 from $270 due to strong clinical revenues and boosted first-quarter sales guidance.

For fiscal 2021, Illumina expects adjusted earnings between $5.10 a share to $5.35 a share.