Canaccord reiterates Buy rating on Illumina after EC orders Grail be divested

Canaccord reiterates a Buy rating on Illumina and maintains a $285 price target on the shares after the European Commission issued a press release outlining its divestment order regarding Illumina’s acquisition of Grail. The EC order that Illumina must divest Grail and ensure the company has enough capital to maintain operations for a reasonable amount of time “could prove to be problematic” as Grail may require nearly $1B in capital, which would be “complicated” for Illumina to fund independently, though Illumina may appeal the EC’s order. The company could retain all or part of Grail if it wins all appeals, the analyst tells investors. The firm, which thinks it is positive that the divestment order has “finally been issued,” believes Illumina may publicly address the questions raised by the lack of detail provided by the EC in the near future, either on a special public conference call or during its Q3 earnings update.