3D Systems Corporation Probably Not A Takeover Target: Analysts


On Tuesday, shares of 3D Systems Corporation (NYSE:DDD) climbed after the company canceled its appearance at a conference being sponsored by Pacific Crest. Because of that cancelation, some speculated that 3D Systems might be an acquisition target. However, analysts at Citigroup and RBC Capital Markets say that’s unlikely.

3D Systems isn’t an attractive target

Citi analyst Kenneth Wong said in a research note to investors that since 3D Systems has a $7 billion market capitalization. This makes an acquisition of the company unrealistic, he said.

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He added that the takeover speculation wasn’t the only thing that gave shares of 3D Systems a boost on Tuesday. The company did reveal a date for its second quarter earnings report, which Wong says probably eliminated the risk of it negatively pre-announcing earnings. He also said positive news regarding 3D bio-printing likely contributed to 3D Systems’ gain on Tuesday. Wong maintained his Neutral rating on 3D Systems.

What does 3D Systems’ cancelation mean?

RBC analyst Amit Daryanani reiterated his Outperform rating and $64 per share price target on 3D Systems and said he didn’t see the significance of the conference cancelation. He said he spoke with media reports about the company’s cancelation and got the impression that it had only “tentatively” planned to attend the Pacific Crest conference. He believes a management conflict is probably the real reason 3D Systems cancelled. After all, the company is going through a transition between chief financial officers.

Daryanani said he was surprised at how 3D Systems’ stock moved, but he expects a material improvement in the company’s fundamentals for the second half of the year. He believes this will give 3D Systems a boost in share price later this year.

The analyst also said this week that a short squeeze could affect the 3D printing company.

Analysts like competitor Stratasys

Shares of competitor Stratasys, Ltd. (NASDAQ:SSYS) also spiked yesterday as Wong and another analyst, Paul Coster of JPMorgan, issued positive reports about it. Coster actually increased his price target from $104 to $138 per share. That report could have weighed on 3D Systems today, as he thinks the company is trading at a big premium to Stratasys.