UBS analyst Steven Milunovich weighed in with his views on 3D printer maker 3D Systems Corporation (NYSE:DDD) after the company announced that it had named veteran executive John N. McMullen as chief financial officer. The analyst reiterated a Sell rating on the stock, with a price target of $9.00, which reflects a potential downside of 34% from current levels.
Milunovich wrote, “After taking the CEO position, Mr Joshi outlined a three-phase plan. The first phase is to listen and learn. The second phase is developing a strategy and organizing around it. Given the recent changes in management, we can assume we are well into phase two. We are encouraged by the move as Mr Joshi and Mr McMullen have a long history together at HP. Both have a proven track record in bringing a nascent technology into the mainstream with the 2D ink jet printer. Given the presence of two “heavy-hitter” HP alumni, we expect the business to operate more efficiently and make quality a priority. The presence of new management may improve customer confidence in dealing with 3D Systems.”
“The stock had risen on more stable results, Mr Joshi’s hiring, and short covering. The P/E multiple of 25x 2017e still seems a bit high to us given low demand visibility and suggests downside from here,” the analyst concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Steven Milunovich has a yearly average return of 0.3% and a 45% success rate. Milunovich has a 1.0% average return when recommending DDD, and is ranked #1994 out of 3976 analysts.
Out of the 18 analysts polled by TipRanks, 2 rate 3D Systems stock a Buy, 13 rate the stock a Hold and 3 recommend a Sell. With a return potential of 5.4%, the stock’s consensus target price stands at $14.05.