Adobe Systems (ADBE): Raising PT After A Beat And Raise Quarter - Cowen
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Cowen analyst, Derrick Wood, reiterated his Outperform rating on shares of Adobe (NASDAQ: ADBE) after reporting a modest beat & raise. The health in digital transformation projects drove upside to Digital Marketing revenue, while Digital Media ARR was in-line with the particular strength out of CC in Education, CS6 migrations and Int'l markets, along with healthy ARPU trends. The FY16 EPS high end of guidance was raised by $0.20, giving investors confidence in continued model leverage.
Management indicated investments are likely to increase next year, so the analyst's projected margins were not materially raised but he raised his price target from $115 to $120. This is based on a ~25x EV/CY17 FCF multiple on a FCF/share estimate of $4.59 (previously $4.53).
Shares of Adobe closed at $100.62 yesterday.
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