Illumina (ILMN) is building clinical momentum as competitive concerns surrounding the company are fading, RBC Capital Markets said in a note Monday.

The company's clinical sequencing revenue could grow at a durable mid-teens rate, driven by volume growth in oncology and easing pricing headwinds, according to the note.

RBC said that while customers are expected to evaluate competitive sequencing instruments, Illumina will likely retain its clinical market share.

Sequencing instrument sales could decline double digits in 2027 as they face more headwinds than previously expected, but clinical sequencing and sequencing services could offset this decline, the firm added.

RBC Capital Markets has an outperform rating and a $230 price target on the stock.

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