J.P Morgan Raises Estimates & PT on Shutterfly, Citing Increased Business Confidence

J.P morgan is maintaining its Overweight rating on Shutterfly SFLY as it believes the company will continue to benefit from strong growth in its personalized products and services business. Additionally, it thinks Shutterfly will achieve better printing facility utilization via the development of its commercial print business. JPM is raising its end-2011 price target to $39 from $32. J.P Morgan expects Shutterfly's non-print revenue to grow 30% in F'10, representing 71% of total revenues. It believes increased penetration of photobooks and continued product development will drive growth in Shutterfly's personalized products & services business. In October 2010, Shutterfly announced a partnership with CVS/pharmacy and Walgreens, giving Shutterfly customers an in-store pickup option at any CVS/pharmacy or Walgreens US store location with a photo center. This adds to the company's existing retail partnership with Target, announced in May 2007. J.P Morgan thinks Shutterfly's expanded retail presence could drive not only print volume growth, as it reduces friction, but also increased awareness and demand for the company's other products.