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What 3D Printer Rebound? Analysts Knock 3D Systems Despite Q4 Beat

Despite fourth-quarter earnings that beat expectations, 3D Systems ( DDD ) was hit by analyst reports saying that a rebound in its 3D printing business is not yet evident. On Monday, 3D Systems stock soared 25% to an eight-month high of 14.45 after the company posted  Q4 earnings  that topped Wall Street’s consensus estimate. But several analysts said that the stock took off due to short sellers buying the stock to cover their positions. 3D Systems stock was down 12%, near 12.50, in afternoon trading in the stock market today . 3D Systems’ Q4 earnings followed the March 3 Q4 earnings report from rival  Stratasys ( SSYS ), which also beat expectations, as did its guidance for 2016. The results from Stratasys and 3D Systems, the two biggest 3D printer companies, suggested that the field might finally be recovering from a rough couple of years. Analysts aren’t convinced. UBS analyst Steven Milunovich, in a research report Tuesday, maintained a sell rating on 3D Systems stock, with a price target of 9. “Management expects flattish revenue in 2016, citing poor visibility and unpredictable spending patterns,” Milunovich wrote. Weston Twigg, an analyst at Pacific Crest Securities, said in a research note that he expects low revenue growth from printers and materials in 2016. “Management believes industry conditions remain challenging, and it expects lots of volatility in quarter-to-quarter results,” Twigg wrote. He maintained a sector weight rating on 3D Systems stock. Among other ratings, JPMorgan downgraded 3D Systems to underweight but raised its price target to 10 from 9. Goldman Sachs maintained a neutral rating and price target of 10, while Jefferies maintained a hold and price target of 13.

Apple iPhone Demand ‘Tracking Ahead Of Expectations’

Apple ( AAPL ) stock rose Tuesday on a report from Morgan Stanley that iPhone sales this quarter are looking better than expected. Apple was up 2%, near 105, in afternoon trading on the stock market today . Morgan Stanley ( MS ) analyst Katy Huberty reiterated her overweight rating on Apple stock with a price target of 135. March-quarter iPhone demand is “tracking ahead of expectations,” she said in a report Tuesday. Based on Morgan Stanley analysis of sell-through data, Apple likely will sell 56.5 million iPhone units in the first quarter, she said. “This is clearly ahead of expectations as investors are skeptical Apple can reach implied guidance of 52 million,” Huberty said. China is the country with the strongest iPhone sales growth, based on Morgan Stanley’s tracker, she said. Apple’s next potential catalyst is its spring product-launch event on Monday. Apple is widely expected to unveil a new 4-inch smartphone, a smaller iPad Pro and new Apple Watch bands. Investors are most likely to focus on the rumored iPhone SE on Monday, S&P Capital IQ analyst Angelo Zino said in a report Tuesday. Apple’s new 4-inch smartphone will replace the iPhone 5S, which was released in September 2013. The new model is expected to sport an A9 chip, NFC technology to enable Apple Pay and a 12-megapixel, rear-facing camera. “We believe the device will be used as an opportunity for Apple to expand into lower cost emerging regions where the company has very low market share,” Zino said. “Given the saturation and slowing growth within the smartphone space and Apple’s already dominant position in the high-end market, we believe expanding its offerings to capitalize in higher growth regions will help support iPhone unit growth over the next 12-18 months. We see the potential of at least an additional 10-15 million in iPhone shipments (around 5% of total unit volume).” Zino has a positive rating on Apple stock with a 12-month price target of 130. On Monday, UBS analyst Steven Milunovich reiterated his buy rating on Apple stock and 12-month price target of 120.

Notebook Blahs, Broadwell Timing Could Slug Intel Q1: Analyst

A Needham analyst trimmed his Intel ( INTC ) Q1 sales views by $500 million Tuesday amid declining PC sales and delayed data center sales, and ahead of the March 31 Broadwell CPU launch. He retained his estimates for the balance of the year, however. In afternoon trading on the stock market today , Intel stock was up a fraction, near 31.50. But shares are down 9% this year on Wall Street due to concerns that PC sales will hit a slump in Q1. Needham’s N. Quinn Bolton is the most recent in a series of analysts to cut expectations. For Q1, Bolton sees $13.6 billion in sales and 46 cents earnings per share ex items, vs. earlier views for $14.1 billion and 50 cents. The largest chunk — $400 million — came out of Intel’s client computing group. Cumulative notebook shipments from Taiwan’s five leading notebook makers fell 32.7% sequentially and 15.7% year over year in January and February, Bolton wrote in a research report. Notebook shipments haven’t been flat in March since 2011. If they are in 2016, he models a 23.3% sequential and 9.7% year-over-year decline in Q1 shipments. Bolton expects Q1 notebook shipments to decline 14.2% quarter over quarter and 3.5% vs. the year-earlier quarter. For Intel, that means $7.44 billion in sales vs. earlier expectations for $7.84 billion. The new model would be relatively flat year over year. He also chopped $100 million off his data center group expectations, noting a potential pause in enterprise data center shopping ahead of the launch of new Intel server chip Broadwell this month. Last year, Intel pulled in $3.7 billion in data center sales. Intel Might Soon Update Its Guidance After Q1, Bolton sees a return to spending. “The weak notebook shipments likely are a result of inventory clearance in the PC channel, and we expect data center group revenue to rebound in Q2 following the Broadwell launch,” he wrote. “We are not changing our Q2, Q3 and Q4 estimates at this time.” Intel could update guidance this week before entering a quarterly quiet period Friday. Per company policy, Intel updates guidance if business appears to be tracking outside the range of original expectations. In January, Intel guided to $14.1 billion, plus or minus $500 million, in current-quarter sales. “Should the company enter the quiet period with no revision to guidance, our new estimates will likely prove conservative,” Bolton wrote. Last month, Nomura analyst Romit Shah lowered his Q1 sales forecast for Intel , modeling a 20% sequential decline vs. earlier views for a 7% decline. In January, a Citigroup analyst modeled a 20%-25% quarter-over-quarter fall in Q1 notebook shipments. But, like Bolton, Shah retained his buy rating on Intel stock, noting Q1 is typically a “back-end loaded quarter.”