Axiom: Shutterfly's Board Vote 'Positive,' New Board Members Could 'Directly Influence Acquisition Talks'

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In a report published Monday, Axiom analyst Victor Anthony maintained a Buy rating on
Shutterfly, Inc.
SFLY
, with a price target of $54. According to the preliminary results of shareholder votes, Shutterfly CEO Jeffrey T. Housenbold was re-elected to the Board and two Marathon Partners appointees Mario Cibelli and Thomas D. Hughes were appointed to the Board of Directors. "We view the results as a positive because, one, it removes the risk that Housenbold would have departed his role as CEO in the event that he lost his board seat, and two, the presence of two activist board members could impose discipline on the organization, particularly with regards to capital allocation. Furthermore, the new members could directly influence acquisition talks should those again emerge," analyst Victor Anthony mentioned. The proxy fight was not only a huge distraction from the company's functioning but also costly. The management can now focus again on managing the business. The company's 2Q performance is expected to be driven by Mother's Day, Graduation Day, Father's Day cards and gift giving. "However, management distraction is (was) a risk that is difficult to get an accurate read on, in addition to the actual cost of the proxy fight, which should put pressure on the headline Adjusted EBITDA number," Anthony added.
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Posted In: Analyst ColorReiterationAnalyst RatingsAxiom Capital Research
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