J.P. Morgan Downgrading Pacific Biosciences

J.P.Morgan Chase & Co. is downgrading shares of Pacific Biosciences Inc. (NASDAQ: PACB) to Underweight from Neutral, and it has a $8 price target.

In a note to clients, J.P.Morgan Chase & Co. writes, "In an 8-K filed after the close, Pacific Biosciences (PACB) announced that it is cutting its workforce by 130, or 28% of the total, “in consideration of uncertainties associated with the economic environment,” as the company's current infrastructure “was staffed to support a faster adoption rate for its products.” PACB expects to end 3Q11 with ~$190M in cash, a decrease of $27M this quarter. We view this move as the first admission that the cash burn is too high and the launch trajectory is slower than anticipated. We are further reducing our Street-low estimates and downgrading to Underweight, with a more constructive view dependent on improved visibility around demand trends and cash burn."

Shares of PACB closed at $5.56 yesterday.