"UPDATE: Bank of America Downgrades 3D Systems as Margin Trajectory is Problematic
8:56a ET February 24, 2014 (Benzinga)
In a report published Monday, Bank of America analyst Wamsi Mohan downgraded the rating on 3D Systems [b](NYSE: DDD) from Buy to Underperform, and lowered the price target from $90.00 to $65.00.
In the report, Bank of America noted, “We are downgrading shares of 3D Systems to Underperform with a PO of $65 for the following reasons (1) Organic growth rate peaking in 2014 and incremental topline growth will come at the expense of margins, (2) We view the increased investments as a catchup in spend necessary to stay competitive rather than driving incremental growth, (3) A lot of the M&A while additive to near term growth, in our opinion, will result in diluting LT organic growth and adds integration and execution risk in the interim, (4) A lot of high profile partnerships sound exciting (Motorola Mobility, Hasbro, Hershey's etc.) but success will be predicated on widespread adoption and margin performance driven by such ventures will likely be challenged.”