Canaccord Cuts 3D Systems Price Target, Staying On Sidelines Before Earnings

• 3D Systems Corporation DDD have plunged 75.33 percent over the past year, while declining almost 7 percent in morning trade on January 15.
• Bobby Burleson of Canaccord Genuity has maintained a Hold rating on the company, while lowering the price target from $10 to $9.
• While expressing optimism that the company’s reorganization plan would prove to be a positive catalyst in 2016, Burleson said that he preferred to stay on the sidelines ahead of the earnings report.

Analyst Bobby Burleson said that he could get more constructive after the earnings report, “given management is likely to lay out an ambitious reorg plan that de-emphasizes consumer, focuses on the core industrial business, and substantially reduces operating expenses.”

Further details of the reorganization plan are expected during the 4Q15 earnings call. Burleson believes that the key to 3D Systems’ stock recovery would be details regarding working capital and a move toward neutral to improving cash flow generation.

According to the Canaccord report, “In late December, DDD announced the discontinued production of its consumer Cube model printer. The move was made to enable the company to better focus on profitable professional and industrial applications.”

Burleson believes that when the AM industry begins to recover, 3D Systems would be well-positioned due to renewed management focus on the company’s core business, as well as its “broad portfolio of professional and industrial grade printers and materials, including metals.”