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3D Printers: What The Analysts Are Saying

3D Printers: What The Analysts Are Saying

On Monday, analysts at Bank of America Merrill Lynch (NYSE: BAC) released research reports on the leading 3D printing companies, Stratasys (NASDAQ: SSYS) and 3D Systems (NYSE: DDD).

The analysts report revealed a bullish sentiment on both companies. Stratasys is Buy rated with a $140 price target, while 3D Systems is also Buy rated with a $90 price target.

Stratasys: Company will continue to post robust revenue growth

According to the analysts, the 3D printer market remains under penetrated. Stratasys should benefit from consumers adopting low end 3D printers, while higher-end printers will continue to be embraced at the corporate level. These higher-priced models will increase the company's bottom line and profit margin over the years, but the real opportunity remains in the consumer market.

The analysts projected around 6,600 consumer grade printers were sold by the company in the third quarter 2013, with an estimated 8,000 units to be sold in the following quarter. The analysts estimated a total of 24,000 units to be sold during full year 2013.

The availability of low-cost scanners should help the company to continue penetrating the consumer market. The company released its MakerBot Digitizer Desktop 3D Scanner and marked the new device with the opening of two stores, one in Boston and the other in Greenwich.

The analysts concluded that the company can sell anywhere from 37,886 units to 96,988 units in 2015, depending on the rate at which consumer printer sales grow. The sales projections translate to an incremental EPS opportunity within a $0.31 to $0.80 range.

Related: Earnings Preview: What Three Analysts Are Saying

3D Systems: Only the largest players will benefit

According to the same analysts at Bank of America Merrill Lynch, 3D Systems, along with Stratasys will benefit from the continued consumer adoption of 3D products, especially at the low end as the market is big enough for more than one major player.

The analysts estimated that in the third quarter 2013, the company sold 6,000 consumer grade printers, with a projected 10,000 units to be sold in the following quarter. The analysts projected a total of 24,000 units sold during the full calendar 2013.

The company recently announced a new product, designed for the consumer market that is optimized for 3D printing, called “The Sense 3D scanner.”

Working in the company's favor are projections that its products will be widely available for the 2013 holiday shopping season in 400 retail stores including Staples (NASDAQ: SPLS) and Office Depot (NYSE: ODP).

The analysts also projected the company's growth using the same growth rates as used in the Stratasys projection model. By 2015, the company is projected to sell units in the range of 37,500 units to 96,000 units, which translates to an incremental EPS of $0.10 to $0.24, depending on the rate at which consumers continue to embrace the devices.

Shares of both companies received a boost following the release of the research reports.

Stratasys was trading higher by 5.06 percent, up $6.32 to $131.30 at around noon during Monday's trading session.

3D Systems was trading higher by 4.26 percent, up $3.42 to $83.59 at the same time.


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