Shares of US 3-D printing companies 3D Systems (DDD), The ExOne Company (XONE), and Stratasys (SSYS) all rose yesterday following some positive notes form bulls on the industry who had paid a visit to the ”Rapid 3D” trade show in Pittsburgh, which kicked off Monday.
FBR Capital Markets‘s Ajay Kejriwal, who has an Outperform rating on ExOne stock, and a $50 price target, writes that in addition to the show floor itself, he sat in for meetings held by the company on site to brief the Street. He said he had company meetings with 3D technology companies, service bureaus, application developers, and users, including Stratasys, EOS, the Swedish company Arcam, SLM Solutions, Concept Laser, Renishaw, and General Electric (GE). Those conversations suggested demand is strong and new applications are drawing a lot of interest from users:
Key takeaways included:
- positive commentary from several participants with regard to demand trends, with expectations of 25%–30% growth in overall 3D industry printer sales.
- a high degree of enthusiasm with regard to metal 3D printing, with chatter around acquisition interest from the larger players in the space (the acquisition announcement by 3D Systems yesterday of Riom, France–based Phenix Systems is indicative of the high interest, and we would not be surprised to see Stratasys follow up with a deal in the space; candidates include Arcam, Concept Laser, and SLM).
- increasing interest in the aerospace, dental, and orthopedic implant markets as new application developments help drive user demand […] GE showcased a 3D-printed fuel nozzle that the company plans to use on its LEAP jet engine. Each engine will use about 20 nozzles to be installed in planes starting in 2015/2016, with GE likely producing 25,000 nozzles annually. Our discussions suggest GE is working on several other 3D projects including parts for gas turbines and healthcare devices.
Piper Jaffray‘s Troy Jensen, who maintains an Overweight rating on 3D Systems, and a $52 price target, and an Overweight rating on Stratasys and a $96 price target, observes that “Attendance at RAPID this year was up roughly 60% from the prior year to 2,400 attendees and the tone at the event was very positive.”
Adds Jensen, “While metals remained the hottest topic at RAPID, it appears overall demand for systems, materials, and services has tracked above plan in Q2 and we are anticipating another favorable earnings season for the industry.”
Jensen met with management of 3D Systems, which during the show announced it was acquiring 80% of privately held Phenix Systems of Riom, France, for €13 per share, which specializes in metal printing. He thinks that deal will help 3D Systems in markets such as medical, aerospace and automotive.
Newsflow around Arcam remains positive and we continue to consider it a good momentum play.
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