Illumina Earnings: Still Waiting for Growth to Accelerate From Recent Weakness

As highlighted in early January, Illumina announced fourth-quarter results that were slightly stronger than anticipated. At first glance, we are not changing our $228 fair value estimate, and shares continue to trade below what we think the legacy business is worth, excluding Grail ($180 per share). Our moat rating on Illumina remains narrow, relating primarily to the intangible assets and switching costs in sequencing. As a reminder, Illumina plans to divest liquid biopsy maker Grail through a third-party or capital market transaction by late 2024, with terms to be settled by midyear.