Goldman Still Neutral On Adobe Despite Beat, Sees No Coming Catalysts

Goldman Sachs’ Heather Bellini maintained a Neutral rating for Adobe Systems Incorporated ADBE, while raising the price target from $60 to $64, after the company reported robust 1Q16 results. The analyst believes that there are no near-term catalysts.

Adobe Systems reported 1Q16 revenues of $1.38 billion, up 22 percent y/y, driven by the outperformance in Digital Media. The company also reported better-than-expected non-GAAP EPS of $0.66, backed by robust operating margins.

Successful Execution On Model Transition

Analyst Heather Bellini noted that Adobe Systems is successfully executing its model transition, which is evident from the company’s outperformance on all fronts including Digital Media ARR.

The company raised its FY16 revenue and non-GAAP EPS guidance from $5.7 billion to $5.8 billion and from $2.70 to $2.80, respectively.

Bellini pointed out that Adobe Systems is expanding beyond its core products, upselling new solutions as well as extending beyond creative pros. He added, “We note that management highlighted that Adobe did not see any macro weakness worldwide.”