UPDATE: Bank of America Reiterates on Adobe Systems Following Executive Meetings

In a report published Tuesday, Bank of America analyst Kash Rangan reiterated a Buy rating on

, and raised the price target from $67.00 to $80.00. In the report, Bank of America noted, “We are raising our PO on ADBE by 19% from $67 to $80 after updating our SOTP and meeting with CEO and CFO. We continue to highlight ADBE as the most compelling play on transition to recurring revenues/Cloud. While the crux of our SOTP valuation is unchanged we have tweaked a few variables that drive our higher PO: 1) Creative Cloud (CC) subs of 5, 9 and 12.5mn in FY15, FY17 and FY19, respectively; 2) CC subs ASP/month of $35, $37 and $40 in FY15, FY17 and FY19, respectively; 3) steady state Creative business EBIT margins of 60%, up from 55% previously; 4) Creative Business EBIT multiple of 12x vs 10x previously but consistent w/ INTU and a slight premium to ORCL; and 5) a Marketing Cloud revenue multiple of 7.5x vs 6x before but consistent w/ CRM.” Adobe Systems closed on Monday at $63.78.