Wedbush Hikes Illumina Target To $250, Feeling Good About 2016

In a report published Tuesday, Wedbush analyst Zarak Khurshid maintained an Outperform rating on

, while raising the price target from $230 to $250. Analyst Zarak Khurshid said that Illumina was expected to report 2Q15 sales and EPS of $533 million and $0.77, respectively, short of the consensus estimates of $542 million and $0.78, respectively. The shortfall was largely due to lower instrument sales and "lack of visibility into X Ten, X5, 3k & 4k systems placements." Khurshid mentioned that the company was witnessing "an inflection in adoption within commercial applications (mainly diagnostics)." The analyst expressed optimism regarding "the long-term potential diagnostics opportunity and continued research market growth driven by ILMN's benchtop (cheaper, more flexible) sequencer and expanding lineup of higher throughput (HiSeq, NextSeq 500, HiSeq X Ten) systems." In the report Webush noted, "NIPT continues to have good momentum based on our checks and population genetics could be a source of upside as well. We did not model a meaningful improvement in Chinese NIPT in 2Q15, but it is possible Berry Genomics (ILMN's key Chinese NIPT partner) ramped quickly following its late March 2015 Chinese FDA approval." While being "slightly cautious" regarding the company's 2Q15 system sales, Khurshid wrote that the 2016 estimates remained above consensus, citing "NIPT momentum and other routine applications."