Piper Jaffray Initiates Coverage On HSN Inc At Overweight, $45 PT

Piper Jaffray is launching coverage on HSN Inc.

shares with an Overweight rating and $45 price target in view of the numerous growth opportunities afforded by HSNi's ability to deliver unique and propriety content through an innovative multi-channel platform. Piper expects HSNi to grow EPS by 15%-20% annually for the foreseeable future driven by current initiatives alone, and it believes that over the next three to five years opportunities exist to generate higher growth rates by monetizing its expertise as a best-in-class provider of marketing content. Piper believes HSN is gaining mindshare with their existing customer base by offering unique, proprietary content featuring product across a broad spectrum of lifestyle categories. In recent years, HSN has increasingly focused on leveraging its marketing expertise by launching brand partnerships, including a multi-year agreement with Kraft Foods, launched in March 2011. Piper Jaffray's $45 PT is based on 20x FY12 EPS, which is in-line with its cross-channel peer group as well as its forecasted FY12 EPS growth rate of 20%. Piper believes that HSNI deserves a premium valuation relative to brick-and-mortar retailers owing to the potential for upwards earnings revisions if consumer adoption of m-commerce and t-commerce is faster than anticipated. HSNI closed Friday at $33.18