Morgan Stanley Maintains EW rating on Adobe
Morgan Stanley reiterates its Equal-weight rating on Adobe Systems Incorporated (NASDAQ: ADBE) after analyst day revealed bold changes and a foundation for long term growth and stability.
According to Morgan Stanley, “ADBE guided down FY12 revenue growth to 4-6% YoY (vs. cons. at +9%)—due to ~$150M in lost revenue from a reduction in the Enterprise business along with a $50M impact to H212 revs. post the CS6 launch to account for a mix shift towards subscriptions. ADBE expects Creative seats will grow 10% in FY12 while Digital Marketing bookings will grow >25% but the ramp in subscriptions/services plus the drag from the Enterprise pullback will moderate FY12 revenue growth and guidance does not anticipate any slowdown in demand from macro softness. Beyond FY12, ADBE believes they can grow revenue double digits while the majority of revenue will be recurring.”
ADBE closed at $28.08 on Wednesday.
