Why Deutsche Bank Still Loves Adobe; Susquehanna Agrees

In a report published Wednesday, Deutsche Bank analysts maintained their Buy rating on

, with a price target of $85, following the company's annual Summit Marketing Cloud user conference in Salt Lake City, Utah. In the report, Deutsche Bank noted, "Marketing Cloud continues to remain a key investment area as F14 bookings increased along the 30%+ y/y target growth trajectory. MC head, Mr. Brad Rancher also highlighted contracts over $1m grew 54% y/y in FY14 where 24% of these contracts had multiple solutions sold and customers with ARR over $500k increased 47% y/y in F14." "The company announced new and more advanced versions of all six marketing cloud modules and added two more modules to the solution: Primetime (video over IP) and Audience Manager (web and CRM data integration) to make Adobe's marketing cloud offerings more comprehensive, integrated and persistent," the analysts wrote. "Core services, announced at last year's Summit, are now in production and available to customers. In addition, Adobe also announced two key partnerships with the leading integrators: IBM and Accenture, to help create integrated and seamless customers experiences across multiple channels and devices." Adobe mentioned that recent trends in Creative Cloud (CC), such as mobile first, design led innovation and the sharing economy, should help augment the tailwinds the CC business is seeing from lower price point driving adoptions. Deutsche Bank analysts added, "…we see ADBE continuing to outperform among our large-cap coverage, with valuation still attractive on a growth-adjusted basis, noting that ADBE stock should also benefit from buyback program." Susquehanna Financial Group analysts added to the positive sentiments, saying, "ADBE's product vision continues to progress alongside the digital transformation that is taking hold by its most strategic customers like Coca-Cola, Starwood and Under Armour, all of which presented at the opening keynote." "ADBE is starting to help companies engage with customers through connected devices to help with ad delivery, content optimization and interaction analysis/customer intelligence. ADBE is also beginning to see more RFPs for the entire Marketing Suite as customers are moving away from point product buying, which we think is a sign that a) there is a more strategic focus on digital transformation projects (aided by growing dedicated practices from SIs and increased budgets for digital marketing investments) and b) ADBE's effort to build and integrate multiple solutions within its Cloud is paying off and helping it form the market leading platform to manage the entire digital engagement lifecycle," the analysts wrote. Susquehanna Financial Group, which has a Positive rating on Adobe and a price target of $87, added, "Overall, we think ADBE continues to help push the industry forward while delivering the products and vision to increase wallet share and capitalize on the dynamic and high-growth Digital Marketing arena."