3D Printer Stocks Soar: BofA Sees New DDD CEO Ending ‘Bloated’ Costs
3D printer stocks 3D Systems ( DDD ) and Stratasys ( SSYS ) skyrocketed Thursday after Bank of America/Merrill Lynch went from bear to bull on 3D. 3D Systems jumped 10.1% to 18.12 on the stock market today , after hitting a nine-month high of 19.76 in the morning. Stratasys rose 5.9% to 29.35, breaking out of a base going back to late October. Bank of America gave 3D Systems a “double upgrade,” raising it to a buy all the way from underperform. It hiked its price target from 11 to 26. Why the sudden switch from bear to bull? BofA sees new CEO Vyomesh Joshi fueling a turnaround. Joshi had worked for HP Inc. ( HPQ ), running HP’s printing business. BofA sees Joshi improving profit margins by going after 3D’s “bloated cost structure.” “The past several years of our negative stance have been predicated on the company’s poor M&A strategy, choice of assets that did not have complete exposure to 3D printing, increasing investments in low margin areas like consumer (now exiting part of low end consumer) and an aggressive investment and channel strategy that led to a bloated cost structure and revenue headwinds,” BofA analysts wrote. BofA raised 3D EPS targets for 2016 by 2 cents to 30 cents, 2017 EPS revised up by 18 cents to 57 cents and 2018 EPS revised up to 71 cents from 43 cents. Smaller 3D printer makers ExOne ( XONE ) and Voxeljet ( VJET ) also rallied Thursday. ExOne jumped 7.6% to their best level since April 2015. Voxeljet climbed 8.6%. Related: 3D Printers Gaining Traction With Nike, Boeing HP Inc.