On Tuesday, Stifel adjusted its stance on Oxford Nanopore Technologies (ONT:LN) (OTC: ONTTF) stock, downgrading it from Hold to Sell and setting a price target of GBP 1.00. The firm's analysis suggests a potential shift in the company's financial outlook for the fiscal year 2024 (FY24), indicating a possible narrowing of revenue guidance.
The downgrade comes as the analyst predicts that the company's second-half revenues for FY24 will reach approximately £101 million, culminating in total revenues of around £185 million for the year. This figure represents an estimated growth of roughly 9% year-over-year.
Achieving this would require a significant 21% growth in the latter half of the year compared to the second half of 2023. The analyst notes that such growth could be attained through a successful launch of the Q-line, new partnerships or projects, and an uptick in product utilization.
Despite these potential avenues for growth, the analyst expresses concern that even if Oxford Nanopore meets these growth targets, the FY24 revenue would still fall short of the midpoint of the company's own guidance range. The company had previously projected a 6-15% increase in revenue, which equates to a range of £180 million to £195 million.
Consequently, Stifel has revised its FY24 revenue growth estimate downward by 4.5%, placing it at the lower end of the company's guidance. This revision reflects a more conservative outlook for the first half of the year and anticipates a slower recovery in the end markets. Oxford Nanopore's stock rating change reflects Stifel's analysis of the company's financial prospects and market challenges ahead.
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