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In a report published Monday, Barclays analyst Christopher Merwin downgrades shares of
Shutterfly, Inc.SFLY from Overweight to Equal Weight and lowered the price target from $62.00 to $50.00.
The analyst commented on Shutterfly's "decelerating organic growth, limited upside from mobile commerce, and a TAM of offline photofinishing dollars that may not shift online as quickly or completely as we originally anticipated." Merwin continued, "we are now more skeptical that offline personal publishing spend will necessarily move online without incremental brand investment, due to the long-term structural headwinds from digitalization of photos and greeting card." In addition, upside from cloud and mobile could be limited.
Barclays lowered their 2014 FCF estimate from $101 million to $97 million. Despite the analyst's cautious outlook for Shutterfly in 2014, Merwin maintains his fourth quarter 2013 estimates. Barclay's organic revenue growth estimates decelerated 15% y/y in 3Q13, down 23% from 4Q12. The Street's estimates 17% revenue growth in 2014.
Shutterfly closed at $46.42 on Friday. Today, shares have traded as low as $43.00, down 7.95%.
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