UBS Lifts PT on Adobe (ADBE) to $46 Post Q1; Creative Cloud Sees Momentum

March 20, 2013 11:35 AM EDT Send to a Friend
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Price: $74.45 --0%

Rating Summary:
    15 Buy, 13 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 5 | Down: 4 | New: 12
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UBS boosted estimates and its price target on Adobe (NASDAQ: ADBE) from $42 to $46 following Q1 results. The firm maintained a Buy rating.

The analyst comments: "Creative Cloud net new subs of 153K was up 16% q/q vs. down guidance and UBSe 125K. Free/trial members now exceed 2M, doubling seq. from 1M in Q4, and providing a large pool for conversion to paid. Perpetual license also appeared strong as total rev $1,008M beat $950-1,000M guide. While FY13 rev & subs guide were reiterated, they appear conservative given the Q1 beat and momentum. A what-if using higher revs & mgns could drive EPS to $2.50 by FY15; a 20x P/E would give a $50 value. Improving revs, margins, & predictability are attractive."

The firm raised FY13 EPS from $1.40 to $1.45 and FY14 from $1.60 to $1.65.

For an analyst ratings summary and ratings history on Adobe click here. For more ratings news on Adobe click here.

Shares of Adobe closed at $40.75 yesterday.


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