Piper Tells Investors To 'Revisit' 3D Printing, Ups Stratasys To Buy

Demand for 3D printer systems and for materials used in the printers rose slightly last quarter compared with the previous quarter, according to research firm Piper Jaffray. Demand for Stratasys' (SSYS) products improved significantly, and the company looks poised to report "solid" first quarter results, according to the firm, which upgraded the stock to Overweight from Neutral. However, other companies in the sector - including 3D Systems (DDD), Materialise (MTLS) and Voxeljet (VJET) - also benefited from improved demand last quarter, the firm believes, calling on investors "to revisit the 3D printing space."

INDUSTRY CHECKS: Last quarter, 12 resellers said that they were above plan for 3D printer systems, versus 13 who were below plan, according to Piper analyst Troy Jensen. The results reached the best levels in two years, indicating that the sector's demand trends have improved, the analyst stated.

STRATASYS: Eight of the company's systems resellers were above plan last quarter, versus only four who were below plan, Jensen reported. It was the first time in two years that demand for systems appears to have exceeded resellers' plans, the analyst stated. The company's execution appears to have improved and it has "some impressive new products," according to Jensen. As a result, he predicted that its results would improve this year, and he raised his price target on Stratasys to $28 from $21.

OTHER COMPANIES: 3D Systems' performance appears to have improved slightly last quarter, but seven of its resellers were below plan for systems while three were above plan, Jensen reported. The outlook for materials is better, as three resellers were above plan for materials and three were below plan. While 3D Systems is improving, it still faces "significant challenges" and "intensifying competition," according to Jensen, who kept an Underweight rating on the stock.

PRICE ACTION: In morning trading, Stratasys rose 11% to $23.65 and 3D Systems climbed nearly 3% to $15.28.

Disclosure: None.

OTHERS TO WATCH: Many others in the retail sector are lower this morning, including Macy's, Kohl's, American Eagle, Nordstrom (JWN), Abercrombie & Fitch (ANF) and Urban Outfitters (URBN).

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