Goldman Sachs Upgrades Shutterfly Inc. (SFLY) to Buy
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Goldman Sachs upgraded Shutterfly Inc. (NASDAQ: SFLY) from Neutral to Buy with a price target of $52.00 (from $47.00), suggesting 27% upside.
Analyst Heath Terry comments, " At less than 5x 2015 EV/EBITDA, we believe the risk/reward in owning SFLY is favorable as the company continues to post at least mid-teens organic growth, leverages a three-year technology and fulfillment driven investment cycle into more sustainable growth, and potentially benefits from the development of a higher margin, less seasonal, more future-proof, cloud product in ThisLife. While consumer transition to digital cards, invitations, and photos remains a long term risk, ThisLife could represent compelling upside at the current valuation."
The firm raised 2014-16 revenue and adjusted EBITDA estimates 2% and 3%, on average, to reflect modest contribution from ThisLife and potential margin leverage in 2015 and beyond.
FY 2014 EPS goes from ($0.33) to ($0.32), FY 2015 EPS goes from $0.68 to $0.82 and FY 2016 EPS goes from $1.09 to $1.31.
Shares of Shutterfly Inc. closed at $41.08 yesterday.
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