UPDATE: 3D Systems (DDD) PT Lowered to $9 at JPMorgan, 'We sense management will be more aggressive on cost cuts'
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JPMorgan analyst Paul J. Chung lowered the price target on 3D Systems (NYSE: DDD) to $9.00 (from $10.00) while maintaining a Underweight rating.
The analyst comments "3D Systems posted challenging 2Q22 results on negative impact from FX, softening customer demand trends, lingering component inflation, and supply chain costs. PF operating profit remains negative for the 2 nd consecutive quarter on lower scale benefits, gross margin pressures and growth in opex base driven by recent acquisitions and R&D spend. FY22 guidance was lowered as the tough macro backdrop expected to extend well into the end of the year and visibility remains low over next 6-12 months in our view. FCF remains depressed, and we sense we need to wait till next year for a rebound in profitability and cash flow as firm brings some manufacturing and inventory in house. Opex continues to ramp in an investment year also weighing on profitability though strong cap structure provides flexibility to do so in our view. We sense management will be more aggressive on cost cuts if temporary headwinds linger longer than expected. We are cutting estimates accordingly, introduce our FY24 estimates and establish our Dec 23 price target of $9.00. Maintain UW."
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