Piper Jaffray Slashes 3D Systems Estimates, Reiterates 'Underweight'

In a report published Thursday, Piper Jaffray analyst Troy D. Jensen reiterated an Underweight rating on

, while lowering the price target from $18 to $16. The analyst expects the company to report its Q2 results marginally below consensus. The analyst also believes that the consensus expectations for 2H15 would prove to be too aggressive, given that 3D Systems is expected to see meaningfully lower growth in 2H. "We continue to believe 2015 will be a reset year for DDD and others in the 3D printing space, but anticipate growth returning in 2016 once we work off the excess capacity installed during the market hype over the past few years," Jensen explained. However, the analyst also expects the stock to continue to face challenges due to execution issues, concerns regarding product quality, channel headwinds and the "overly aggressive" consensus expectations. At the same time, the Piper Jaffray report states that there has been a sequential improvement in demand for 3D printing in Q2, and that the industry is expected to continue to see quarterly growth through the remainder of the year. The revenue and EPS estimates for 2015 and 2016 have been lowered to reflect expectations of significantly lower growth during 2H, along with marginally lower expectations for Q2.