Standpoint Research Starts Adobe (ADBE) at Buy
ADBE Hot Sheet
Rating Summary:6 Buy, 10 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Standpoint Research initiates coverage on Adobe (Nasdaq: ADBE) with a Buy rating and $36 price target.
The firm said, "If we can catch a 1000-1500 basis points gain versus the S&P, we may decide to close this out before it hits our price target. The shares have been oversold on bad news, down 30% year-to-date (including 15% in the last week). I have looked at this name many times over the years … this is the first time it looks attractive on valuation and otherwise. Shares have limited downside and will be supported by a $1.6 billion buyback that is a significant size (11%) relative to its market capitalization. Revenues should jump by 25% over the next 24-36 months and top $5,000,000,000. I expect EPS will rise by a faster pace. ADBE is now trading at 2003 levels adjusted for inflation even though EPS is 4X what it was back then. The shares score well on our 155-variable computer model and passed our fundamental and subjective overlays. Our price target is 15X $2.40 in earnings potential looking out two years.
The firm said, "If we can catch a 1000-1500 basis points gain versus the S&P, we may decide to close this out before it hits our price target. The shares have been oversold on bad news, down 30% year-to-date (including 15% in the last week). I have looked at this name many times over the years … this is the first time it looks attractive on valuation and otherwise. Shares have limited downside and will be supported by a $1.6 billion buyback that is a significant size (11%) relative to its market capitalization. Revenues should jump by 25% over the next 24-36 months and top $5,000,000,000. I expect EPS will rise by a faster pace. ADBE is now trading at 2003 levels adjusted for inflation even though EPS is 4X what it was back then. The shares score well on our 155-variable computer model and passed our fundamental and subjective overlays. Our price target is 15X $2.40 in earnings potential looking out two years.
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