UPDATE: Bank of America Merrill Lynch Reiterates Buy Rating, Raises PT on Adobe Systems
In a report published Friday, Bank of America Merrill Lynch reiterated its Buy rating on Adobe Systems (NASDAQ: ADBE), and raised its price target from $38.00 to $40.00.
BofA Merrill Lynch noted, “Adobe's acceleration of Creative revs shift from license to subscription while already widely anticipated is now expected to occur at an even faster pace. New F13 guide post F4Q implies that ests could take a significant haircut, however this is a self-induced model transition that yields better shareholder value LT as Adobe gets away from lumpy product cycles to more predictable revenues. In our view, F14 and beyond will likely show the real power of this new business model with rising revs, op margins and significant EPS growth. While our FY13 revs and EPS ests go to $4.1bn/$1.40 from $4.4bn/$2.41, we note that Adobe is making the shift from a position of strength and on the heels of a solid qtr where Creative units grew 13% y/y for FY12 (vs. est of 10%) and F4Q:12 adjusted revs grew 9% y/y.”
Adobe Systems closed on Thursday at $35.53.
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