Wunderlich Previews Adobe's Earnings

In a report published Monday, Wunderlich analyst Rob Breza maintained a Hold rating on

, with a price target of $90. Adobe is a diversified software company in the digital media and print and publishing segment. Market checks have revealed that the company has ended the second quarter on a positive note, driven by the strength in its creative suite and individual products within the Photoshop bundle. The company is expected to report 2Q revenues and EPS of $1.154 billion and $0.45, respectively. "We expect key metrics of subscriber growth and total annual recurring revenue (ARR) of ~620K and $2.3B. During 1Q, Adobe reported weak subscriber growth numbers as a result of experimental bundling and the stock price declined as a result. For 2Q, we expect Adobe will report approximately 15.6% q/q subscriber growth, representing approximately 620k subscribers added," analyst Rob Breza mentioned. Adobe's share price had declined to a low of $72.97 after the company reported weak 1Q results. The stock has, however, recovered to $79.93 on expectations of a brighter outlook and strong 2Q results. "However, with Adobe in the later stage of its transition, we believe there is limited upside potential that is fully priced in," Breza added. Adobe's 3Q performance is generally restricted by seasonal factors. "…we estimate that Adobe's current transition may have a larger impact on bookings growth. Thus, we continue to expect bookings growth of only 17% y/y in 3Q15," the report stated.