Market Overview

UBS Picks Stratasys Over 3D Systems

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On Tuesday, UBS initiated coverage on the 3D printing sector. Analyst Steven Milunovich slapped a Neutral rating on shares of 3D Systems (NASDAQ: DDD) with a $62 price target, as well as a Buy rating on Stratasys (NASDAQ: SSYS) 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 Hewlett-Packard (NASDAQ: HPQ) is expected within the year.

According to the analyst, 3D Systems is distinguished by:

  1. The broadest product line in offering seven print engine technologies.
  2. Aggressive acquisition strategy with immediate integration.
  3. Ability to print in metals using SLA/SLS technologies, unlike Stratasys.

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.

Latest Ratings for DDD

DateFirmActionFromTo
Oct 2014OppenheimerInitiates Coverage onOutperform
Oct 2014Deutsche BankDowngradesBuyHold
Sep 2014Pacific CrestDowngradesOutperformSector Perform

View More Analyst Ratings for DDD
View the Latest Analyst Ratings

Posted-In: Steven Milunovich UBSAnalyst Color Price Target Initiation Analyst Ratings

 

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