UBS Picks Stratasys Over 3D Systems

On Tuesday, UBS initiated coverage on the 3D printing sector. Analyst Steven Milunovich slapped a Neutral rating on shares of

with a $62 price target, as well as a Buy rating on

with a $125 price target. Shares are up 1.7 and 3.9 percent, respectively. Milunovich advised that investors be “selective” when playing the space as competition from

is expected within the year. According to the analyst, 3D Systems is distinguished by:

Near term financials issues may look unattractive compared to competitors, but Milunovich believes 3D Systems is “better long term as it emphasizes sales to aerospace, automotive, and healthcare.” The analyst prefers Stratasys to 3D Systems because of “better execution, a narrower focus, and immediate upside potential from MakerBot.” MakerBot sells more than half its systems to professional engineers and is projected to grow sales by about 70% this year. Lack of metals capability is a potential weakness though the company says it is not a priority,” said Milunovich. Looking forward, Milunovich will be watching printing and material pricing pressure as competition intensifies.