Shares of 3D Systems (DDD) are rising following research firm Bank of America Merrill Lynch's double upgrade of the stock to a Buy rating. The firm's analyst sees the announcement of the new CEO as a much needed catalyst. However, Piper Jaffray remains cautious on the 3D printing universe, expecting first quarter system and material sales to come below expectations.

CEO TO DRIVE TURNAROUND: BofA Merrill analyst Wamsi Mohan upgraded 3D Systems two notches to Buy from Underperform and raised his price target on the shares to $26 from $11. Following two years of underperformance, Mohan believes recently appointed CEO Vyomesh Joshi can bring direction and visibility to the business to drive efficient cost cutting initiatives, implement more effective merger and acquisition strategy, and establish a more focused portfolio. Mohan also views Joshi as well-equipped to turn around the company from an operational standpoint. The analyst added that he can see a path to earnings upside, even if secular demand for 3D printers is weak. After a five month long executive search following the departure of CEO Abraham Reichtental, 3D Systems announced Vyomesh Joshi as President and CEO on April 4.

PIPER CAUTIOUS ON SPACE: Piper Jaffray analyst Troy Jensen says his firm's 3D printing survey once again indicated system demand remained challenged in the March quarter, with total system and material sales below expectations. Many sellers stated that demand was "extremely challenging" during the month of January, the analyst told investors. However, the analyst said he still expects demand to improve in the second half of 2016 and he continues to prefer Stratasys (SSYS) over 3D Systems, adding that he wouldn't be surprised if first quarter results came in below consensus estimates.

PRICE ACTION: In later morning trading, 3D Systems' stock was up more than 14% to $19 per share while Stratasys rose 8% to $29.95. Fellow 3D printer makers Voxeljet (VJET) and ExOne (XONE) rose 5.6% and 8.7%, respectively.