Market Overview

Bank of America Reiterates Underperform on 3D Systems and Lowered PT on Lower LT Margin

Share:
Related DDD
Top Performing Industries For December 5, 2016
Industry Expert Talks About 3D Printing In Latin America: 'We Want Printers To Supplement Other Machines'
3D Printing Taps 4th Industrial Revolution; HP Discusses Big Ambitions (Investor's Business Daily)

In a report published Monday, Bank of America Merrill Lynch analyst Wamsi Mohan reiterated an Underperform rating on 3D Systems Corp. (NYSE: DDD) and lowered the price target from $60.00 to $55.00 to better reflect underperforming consensus margins.

Mohan noted 3D Systems investment in Project Ara, a modular phone with preferences able to be swapped or upgraded on user preference. Bank of America analyzed the penetration of Ara phones into Android smartphone shipments and reported that 3D Systems operating margins declined as early as 2015/2016. The analyst pointed out the lower margin revenue from the project and "inferior" returns.

Bank of America commented, "We envision a scenario where 3D Systems ends up as a service provider for the Google Ara project, getting orders for a certain number of units, and in turn, building and shipping those units. As such, 3D Systems' margins should trend towards service provider margins with the benefit of lower material costs. In our opinion, operating margins will be 22% or lower (more likely) for this project relative to overall company consensus projections of 22% in 2015 and 27% in 2016."

Shares of 3D Systems Corp. closed at $59.07 on Friday.

Latest Ratings for DDD

DateFirmActionFromTo
Nov 2016Gabelli & Co.UpgradesHoldBuy
Oct 2016FBR CapitalAssumesMarket Perform
Aug 2016JefferiesMaintainsHold

View More Analyst Ratings for DDD
View the Latest Analyst Ratings

Posted-In: Bank of America Merrill Lynch Wamsi MohanAnalyst Color Price Target Analyst Ratings

 

Related Articles (DDD)

View Comments and Join the Discussion!