Investing.com -- Illumina received a bullish rating upgrade from JPMorgan, which raised its recommendation to Overweight from Neutral and lifted its December 2026 price target to $185 from $125, citing growing confidence in the DNA sequencing company's ability to sustain strong growth despite increasing competition.

The brokerage said concerns that customers could migrate to rival sequencing platforms have eased after recent surveys and industry checks indicated that Illumina's large clinical customers remain highly committed to its ecosystem. JPMorgan highlighted significant switching costs, widespread adoption of Illumina's NovaSeq X platform, and expanding demand for genomic testing as key factors supporting future growth.

A survey of 62 research and clinical customers suggested spending on sequencing instruments and consumables is expected to accelerate through 2027 and 2028, with respondents also forecasting gains in Illumina's share of next-generation sequencing activity. Clinical customers, in particular, indicated strong expectations for increased testing volumes and equipment purchases.

JPMorgan said structural growth drivers in precision medicine, including therapy selection, minimal residual disease (MRD) monitoring and multi-cancer early detection (MCED) testing, should support sustained demand for sequencing. The bank also pointed to rising sequencing intensity as laboratories adopt whole-genome sequencing, RNA sequencing and broader multiomics workflows.

While Roche's Axelios 1 platform remains a competitive threat, JPMorgan argued that concerns over workflow complexity, reusable flow-cell contamination risks and higher DNA input requirements could slow customer adoption. The bank expects Illumina's clinical consumables business to deliver low- to mid-teens growth over the coming years, helping the company achieve high-single-digit organic revenue growth from 2027 onward.

JPMorgan forecasts Illumina's revenue will rise to $4.58 billion in 2026 from $4.34 billion in 2025, with adjusted earnings per share increasing to $5.23 from $4.84. The bank expects the company to maintain a mid- to high-teens earnings growth profile through the end of the decade.