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Stamps.com Stock Jumps as Shippers Play ‘Musical Chairs’

Cristin Flanagan

(Bloomberg) -- Stamps.com Inc. shares surged on Thursday after the company raised the midpoint of its yearly forecast, easing some investors’ worst fears.

The stock rose 34% at the open -- the biggest gain in two years. Shares were at the highest since May when a forecast cut caused shares to plummet. Ken McBride, Stamps’ chief executive, told investors on last night’s earnings call that the company was seeing a “a positive shift” in the U.S. Postal Service’s approach to Stamps’ reseller partners.

That was enough for one Craig-Hallum analyst, who raised his rating back to a buy and his 12-month price target to $60 from $48. “Sentiment goes from blatantly negative to modestly encouraging” after the “death march” of the prior two earnings calls, analyst George Sutton wrote in a note to clients.

“Given the tremendous game of musical chairs occurring in the shipping space,” Sutton said, “we (and the stock) obviously have concern relative to the company’s position in the ecosystem.” If Stamps.com reached a new accord with a large carrier, that could be a significant catalyst for shares, he said.

The rest of the Street was less optimistic on a Stamps recovery. For example, Roth analyst Darren Aftahi cautioned, “investors and the stock should have something to cheer about, but it might be short lived.”

Stamps “still has many plugs to patch” and forward earnings guidance was only a little better than “the ‘worst case scenario’ communicated on the last call,” Aftahi said.

Aftahi is the only analyst tracked by Bloomberg to rate Stamps a sell, while Craig-Hallum is the only bank to rate the company a buy. Three other analysts carry a hold rating.

(Updates shares in second paragraph, adds chart.)

To contact the reporter on this story: Cristin Flanagan in New York at cflanagan1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Scott Schnipper

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