Jefferies Comments On Shutterfly Following Tiny Print Acquisition; Raises PT To $49

Jefferies views Tiny Print's acquisition positively given that: it strengthens Shutterfly's SFLY competitive position by adding a strong differentiated brand, it expands the company's market share in a rapidly growing segment, and positions SFLY to realize meaningful cost synergies over time. Jefferies is raising its PT to $49 from $49 and reiterating its Buy rating. The deal makes strategic sense given that SFLY is consolidating its most comparable competitor, one that's growing materially faster and Tiny Print's lack of printing capability will allow Shutterfly to leverage its own print production and fulfillment to drive TP's margins materially higher. With TP's focus on personalization and quality targeted at higher-end customers, its product portfolio of greeting cards, invites, stationery, calendars, etc., is easily cross-marketed to SFLY's base of ~4M customers. In return, Shutterfly's strong photo book offering can be promoted to TP's customers. If successful, these synergies can help accelerate growth in SFLY's core PPS. Jefferies has a Buy rating on SFLY SFLY closed Monday at $43.03