VistaPrint shares climb after analyst's upgrade

posted: 76 DAYS 20 HOURS AGO

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SAN FRANCISCO -Shares of VistaPrint NV, which sells business cards and other printed products online, rose Wednesday after a Citi Investment Research analyst upgraded the stock following a recent drop in the share price.

VistaPrint shares climbed $2.45, or 4.9 percent, to $52.70.

In a client note, Mark Mahaney raised his rating for the stock to "Buy" from "Hold" and increased his price target by $7 to $62.

Mahaney thinks the share drop was due to a negative Senate committee report in mid-November about an online marketing strategy where consumers are offered rewards in exchange for joining membership programs that then charge them monthly fees. The report named VistaPrint as a beneficiary of such programs, he said, and he thinks this was the impetus for a decline in the stock. The shares have fallen 7 percent since then.

But the analyst said he has consistently seen VistaPrint as a "core Internet holding" and one of few Web companies with a sustainable three-year earnings-per-share outlook for 20 percent or more growth.

He also said a recent factory tour makes him more confident in the company's growth and efficiency prospects, noting that the company plans to double the size of its production facility next year.

"Further, our qualitative tour takeaway highlight the company's efficiency steps/opportunities across labor, materials, shipping and overhead," he said.

2009-11-25 13:08:14