UBS Raises Price Target on Adobe Systems (ADBE) Following Solid 3Q
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UBS reiterated a Buy rating on Adobe Systems (NASDAQ: ADBE), and raised the price target to $130.00 (from $122.00), following the company's 3Q earnings report.ADBE reported revenue of $1464M, ahead of $1,445M estimates. EPS of $0.75 came in 0.03 ahead of estimates.
Analyst Brent Thill commented, "We believe strong results across all Clouds + oper. leverage showed ADBE stock still has room to run despite being near record levels. We are raising our 12-mo PT from $122 to $130, using same 30x P/E (PEG 1.0x) on EPS in 5-8 Qs, which may still be conservative. We think the stock could reach $150 if EPS hits $6 in FY19 (current UBSe $5.68) on a muted 25x P/E vs. current 29x NTM. What is driving momentum for each segment (details in next bullet)? Creative Cloud: still room in base migration + adding new users; renewal at full price from discounted; Japan & Germany above pace; Fotolia/Stock x-sells; and digital content explosion across web & mobile. Document Cloud: fast migration to subs. Marketing Cloud: Clients looking for digital transformation choosing leader ADBE (43% share among large vendors) with broadest suite – accelerating deals in Q3 and buying multiple modules; int'l still a big opp. Next catalyst is MAX user conf. on Nov 2-4 (analyst day on 11/2), when we could get an early view into FY17 outlook."
Shares of Adobe closed at $100.62 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
Related EntitiesUBS, Earnings
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