UPDATE: Piper Jaffray Raises PT to $72 on IPG Photonics on Secular Fiber Growth
Piper Jaffray reiterated its Overweight rating on IPG Photonics (NASDAQ: IPGP) and increased its price target of $63 to $72.
Piper Jaffray noted, "Key reasons for our positive view include: 1) the secular growth in fiber lasers as the market could reach $1.4bn by 2015 from $600m in 2011 (~25% CAGR) given early stage adoption in cutting and various material processing segments; 2) the threat from competition remains overblown given the learning curve for any new entrant is quite daunting both from yields and cost parity compared to IPGP. We therefore expect IPGP to sustain its gross margins of 53% to 55%; and finally 3) given the fiber laser market growth and 75-80% share that IPGP can sustain, we see its revenues rising to $180-$200m/qtr from ~$150m/qtr presently which would result in $1.00 in quarterly EPS exiting CYQ4'13."
IPG Photonics closed at $61.49 on Friday.
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