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3D Systems Down 12%; What Does The Street Think Now?

3D Systems Down 12%; What Does The Street Think Now?

Shares of 3D Systems Corporation (NYSE: DDD) fell as much as 4 percent in Tuesday's pre-market hours after JPMorgan downgraded the stock to Underweight despite better-than-expected quarterly results pushing the stock up 25 percent on Monday.

JPMorgan: Downgrade To Underweight, PT Raised To $10

Analyst Paul Coster of JPMorgan cut his rating on DDD to Underweight from Neutral citing "valuation, lack of catalysts and limited near-term visibility." However, he increased the price target to $10 from $9.

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"We believe the stock overreacted positively yesterday (up ~25 percent vs. S&P flattish) primarily owing to a short squeeze, and we think much like near peer Stratasys, Ltd. (NASDAQ: SSYS), investors are pricing in unrealistic expectations of a V-shaped recovery," Coster wrote in a note to clients.

"We think the stock's ~68 percent YTD performance (S&P down 1.8 percent )is a bit excessive given no clear signal end market demand is sharply rebounding (SSYS FY16 Outlook calls for 3 percent growth/DDD expects flat to slightly up), leaving minimal margin for error for this execution story," Coster added.

Jefferies: Raises PT To $13

Meanwhile, Jefferies analyst Jason North said the timing of a demand rebound is uncertain. He said new entrants could pressure 3D System's gross margin, and HP's 3D launch at the end of 2016 poses risk to 3D System's Q4 revenues. The analyst reiterated his Hold rating and raised his price target to $13 from $9.

Goldman Sachs: Maintain At Neutral, PT Raised To $10

3D Systems' quarterly earnings topped Street view on cost savings and lower operating expenses. The company reported earnings of $0.19 per share, $0.11 above the Street's consensus. Revenue of $183.36 million also came in ahead of expectations for $182.88 million. Management expects FY16 demand up slightly or flattish, but with significant unevenness and volatility throughout the year.

"While the quarter is encouraging, we note that long-term cost profile questions remain, and demand still has not improved (2016 guided to flat to slightly positive)," Goldman Sachs analyst Samuel Eisner said in a client note.

Eisner maintained his Neutral rating on the stock, but raised the price target by $1 to $10.

Citi: Neutral, PT At $10

"The sector is sentiment driven and we do not yet feel investors are ready to place a "growth" multiple on shares, which keeps us Neutral. DDD is currently trading at 26x CY17 PE and unlikely to see multiple expansion until investors are convinced that growth and execution will arrive in a more linear fashion," Citi analyst Kenneth Wong wrote in a note to clients.

Wong has a Neutral rating and $10 price target on DDD stock, which closed Monday's regular trading at $14.45.

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Latest Ratings for DDD

Nov 2020William BlairUpgradesUnderperformMarket Perform
Oct 2020BerenbergInitiates Coverage OnBuy
May 2020CFRAMaintainsHold

View More Analyst Ratings for DDD
View the Latest Analyst Ratings


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