Investing.com -- HSBC downgraded Illumina Inc (NASDAQ: ILMN ) to “Hold” from “Buy” and slashed its price target to $100 from $190, citing new headwinds from China, potential U.S. research funding cuts, and rising competition in the sequencing market.

Illumina’s stock has fallen about 33% year-to-date, underperforming the broader market, and HSBC sees limited near-term catalysts for recovery.

The firm highlighted three emerging risks: China’s decision to place Illumina on its unreliable entity list, which could impact about 7% of its revenue; possible cuts to National Institutes of Health (NIH) budgets, which may reduce demand from academic customers; and new sequencing technology from Roche Holding AG (OTC: RHHVF ) Participation (SIX: ROG ), which could increase pricing pressure.

HSBC noted that Illumina is losing its market dominance, with declining instrument placements in the low-to-mid throughput segments and weaker revenue from China. The company’s prolonged focus on its GRAIL acquisition has allowed competitors to gain ground, eroding its pricing power and market leadership.

HSBC had previously expected 2025 to be a recovery year but now forecasts only mid-single-digit revenue growth over the medium term. The firm adjusted its financial models to reflect lower sequencing revenues and a higher cost of capital, citing execution risks and geopolitical uncertainties.

Despite Illumina trading at a significant discount to historical valuation multiples, HSBC believes the stock faces too many near-term risks to warrant a bullish stance.