Will Stratasys, Ltd. Shares Hit $125?

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Stratasys, Ltd. (NASDAQ: SSYS  ) rallied as high as 5% on Monday after JPMorgan upgraded the 3-D printing technologist from neutral to overweight.

So what: Along with the upgrade, analyst Paul Coster reiterated his price target of $125, representing about 17% worth of upside to Friday's close. So while momentum traders might be turned off by the stock's weakness in recent months, Coster's call could reflect a growing sense on Wall Street that Stratasys' prospects are becoming too cheap to pass up.

Now what: According to JPMorgan, Stratasys' risk/reward trade-off is quite attractive at this point. "Growth prospects for SSYS and the broader 3D printing/additive manufacturing space remain compelling in our view, and we believe SSYS is best-in-class pure-play and therefore a core holding for tech growth investors," said Coster. "The threat of new entrants into the space seems to have weighed on investor sentiment, but we believe successful emerging competitors are likely to occupy distinct niches in this large and highly fragmented market." When you couple that upbeat outlook with Stratasys' recent pullback, it's tough to disagree with JPMorgan's upgrade. 

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  • Report this Comment On March 24, 2014, at 3:03 PM, keelfoot wrote:

    This just confirms what is obvious when you look at the long history of the kinds of "stuff" that SSYS has sold, and its list of customers. Extrapolate to the future sales growth (and strength) of those customers, and you quickly see why it makes sense to stay with this company as the better investment among those in this sector. The future for SSYS is stable and strong, and it is "the kind of company I want to own". Throw in all the fancy metrics if you want to feel more comfortable about owning this one, but it will be very hard for SSYS to stumble and fall, based on proven performance.

  • Report this Comment On March 25, 2014, at 4:33 AM, Interventizio wrote:

    I never listen to institutional clowns. And as one of your colleagues explains in an article from yesterday, JPM has a tradition for screwing it up bit time in terms of stock forecasts.

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