Shutterfly (SFLY) Weakness an Overreaction - Baird
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Baird analyst Colin Sebastian weighed in on Shutterfly Inc. (NASDAQ: SFLY) on news of Amazon Prints, a digital photo printing service that offers standard digital printing, photo books, and eventually will expand to stationary and calendar.
Sebastian notes while Shutterfly's brand provides some competitive insulation, the Amazon announcement comes on the heels of Google Photos rumored expansion into physical printing, and dredges up old concerns around competitive pressure from large-scale platforms (e.g., Apple Photo books a long-time, but small-scale competitor; potential Facebook photo monetization).
He said while they believe today's stock move is an overreaction, Amazon's technology sophistication should not be completely discounted.
"We would be buyers on today's weakness, assuming Amazon's photo offering is geared toward augmenting Prime/Drive value vs. disrupting the photo book market," the analyst commentd.
The firm maintained an Outperform rating and price target of $59.00
Shares of Shutterfly Inc. closed at $50.48 yesterday.
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