UPDATE: FBR Capital Markets Initiates Coverage on 3D Systems on Continued Positive Outlook

In a report published Tuesday, FBR Capital Markets analyst Ajay Kejriwal initiated coverage on

with an Outperform rating and $85.00 price target. In the report, FBR Capital Markets noted, “3D Systems is a leading 3D content-to-print solutions provider, including 3D printers, materials, and on-demand parts, as well as software tools, such as scan to CAD and inspection. No doubt, the company has had its share of controversies, and valuation is by no means cheap. However, we like 3D Systems' solid and diversified portfolio of patented technologies (SLA, SLS, SLM, MJP, and others), proprietary materials, and software solutions that should not only help address rising customer demand but also drive penetration and the adoption rate of 3D printing as a whole. Despite some concerns regarding potential new competition from lower-priced SLA and SLS printers as some patents expire in 2014, we believe 3D Systems should continue to deliver high growth rates for the next several years as management's initiatives in aggressively expanding applications beyond prototyping into production parts and in the consumer markets start bearing fruit. We also expect management to continue aggressively adding to its printer, material, software, and service portfolio through smart bolt-on acquisitions. We think a burgeoning line-up of new products, many of which are expected to be announced over the next few weeks, and new industry partnerships could potentially provide catalysts for the stock over the near term.” 3D Systems closed on Monday at $76.89.