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GE's $1.4B purchase of a pair of 3D-printer companies sent stocks in the group soaring in today's trade, with 3D Systems (NYSE:DDD) closing +5.5%, Stratasys (NASDAQ:SSYS) +3.7%, Voxeljet (NYSE:VJET) +4.6% and ExOne (NASDAQ:XONE) +5.8%.
- But GE closed 0.7% lower, as analysts say that while 3D printing is promising, GE’s acquisitions are a “net negative” because there are relatively few short-term benefits.
- “This seems like a relatively outsized and expensive bet, with no near-term return, and an incremental opportunity cost when considering the ongoing debate around what we view as finite balance sheet capacity,” says J.P. Morgan's Steve Tusa.
- Cowen analyst Gautam Khanna takes a longer view, saying that “while the deals appear pricey, they help position GE to lead, implement and control additive manufacturing processes that will become important cost-reduction levers long term in Aviation and elsewhere."
- As for the 3-D companies, Citigroup’s Kenneth Wong says that while the GE deal does not present any immediate competition for them, it does not necessarily suggest any buyout implications for the companies since GE is focusing on metal applications.