TD Cowen analyst Daniel Brennan maintained a Hold rating on 10x Genomics (TXG – Research Report) yesterday and set a price target of $11.00.
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Daniel Brennan has given his Hold rating due to a combination of factors affecting 10x Genomics. The company’s first-quarter sales exceeded expectations by 4%, particularly in consumables, despite a challenging macroeconomic environment. However, the uncertain outlook for U.S. academic and government customers, who account for a significant portion of the company’s sales, has led management to withdraw annual guidance and instead provide quarterly guidance, which is slightly below consensus for the second quarter.
On the positive side, 10x Genomics is taking steps to manage costs effectively, including an 8% reduction in operating expenses, and maintaining a strong cash position with over $400 million available. Despite these efforts, the uncertainty surrounding NIH funding continues to impact customer confidence and spending patterns. While the company’s long-term prospects remain promising due to its leading position in single-cell and spatial analysis, the current uncertainties and potential risks to future revenue estimates justify maintaining a Hold rating. Consequently, the price target has been adjusted to $11, reflecting these considerations.