UPDATE: Morgan Stanley Downgrades Shutterfly to Equal-Weight, Lowers PT to $30

Morgan Stanley downgrades Shutterfly SFLY to Equal-weight from Overweight and lowers its price target to $40 from $37 as product commoditization moves upstream. Morgan Stanley says, "Shutterfly's stock was down 45% during the holiday season, due to the promotional environment. We are downgrading Shutterfly, due to product commoditization and higher customer acquisition costs." SFLY closed at $24.06 per share on Thursday.