Two research firms expressed optimism today about Illumina's (ILMN) new cell sequencing product, predicting that it would cause sales of the company's newer instruments to rise. The product enables researchers to more effectively analyze single cells, the company stated.

NEWS: Last night, Illumina unveiled its new single-cell sequencing product, the llumina Bio-Rad Single-Cell Sequencing Solution, also known as NovaSeq. The product allows investigators to evaluate single cells' influence on disease progression and their response to treatments, Illumina stated. It also "delivers high-thoroughput sequencing of thousands of individual cells," the company reported. "In the same way that HiSeq X enabled the $1,000 genome with the HiSeq architecture first announced in 2010, we believe that future systems derived from the NovaSeq architecture we are launching today one day will enable the $100 genome and propel discoveries that will enable a deeper understanding and better treatments for complex disease," said Francis deSouza, President and CEO of Illumina.

ANALYST REACTION: Calling the NovaSeq "a substantial improvement over the current high-end sequencing platform," Bank of America Merrill Lynch analyst Derik de Bruin upgraded the stock to Buy from Neutral. He believes that the upgrade could spark a significant increase in demand for Illumina's newer instruments, and he estimated that the company's growth ,excluding acquisitions, can reach around 15% by 2018. The analyst hiked his price target on the name to $175 from $145. Also upbeat about the news was Piper Jaffray analyst William Quirk. Up to three times more powerful and about 20% cheaper than its predecessor, NovaSeq could cause sales of Illumina's newer instruments to rise for multiple years, Quirk believes. The company's stock typically does well when demand for its newer products is strong, Quirk stated. He raised his price target on the shares to $170 from $148 and kept an Overweight rating on the stock.

LESS BULLISH: Puneet Souda, an analyst at Leerink Partners, was less optimistic about the impact of NovaSeq. Due to several factors, including excess capacity and funding uncertainties, demand for high-throughput sequencers such as NovaSeq "remains weak into 2017," Souda believes. The analyst raised the price target on Illumina shares to $132 from $114 but kept a Market Perform rating on the stock.

PRICE ACTION: In early trading, Illumina climbed 14.4% to $161.92 per share.