Adobe Systems (ADBE) Falls After FBR Downgrade

Shares of Adobe Systems, Inc. (NASDAQ: ADBE) are 7.7% lower today after Friedman Billing Ramsey downgraded the stock from Market Perform to Underperform, citing valution and slowing revenue. The firm maintained their $17 price target.

The firm said, "the shares have risen to a point where we believe the risk-reward profile is unfavorable." They note ADBE is up 16% since preannouncing a material revenue miss in early December, versus a 6% gain in the NASDAQ.

The firm cited three main points for their downgrade. 1. expectations remain too high; 2. dependence on new unit sales and lack of recurring revenue could put its growth profile among the bottom in the enterprise software sector during this downturn; 3. past Creative Solutions cycles suggests the shares could experience further multiple contraction.

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