Shutterfly SFLY shares shot up nearly 15 percent Wednesday after Bloomberg reported that the company hired Qatalyst partners to help explore sales.
Topeka Capital analyst Victor Anthony weighed in on the possibility of a sale, “We have stated in past notes that SFLY is an attractive acquisition candidate… With that said, we thought a sale of the company was a longer-term exit strategy for CEO Jeff Housenbold, so we are surprised by the timing.” Amazon is a logical buyer because the companies are in the same space.
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Anthony thinks that a takeover would be worth about $70 per share. A $58 price target was derived with a DCF, but a 20 percent takeover premium takes the price to $70.
Shares were last trading at $50.50, meaning another 20 percent of upside remains in the stock, according to Topeka, if Shutterfly is acquired.
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