RBC Capital's Ross MacMillan reiterated Adobe Systems Incorporated ADBE Outperform rating with a price target of $104.00. The reiteration came after Adobe reported EPS at $0.69–$0.75 vs $0.71 estimates Tuesday.
The analyst was impressed with Adobe's beat on earnings Tuesday, but was disappointed with four reported statistics and guidance:
- Weaker revenue guide of $1.42 billion–$1.47 billion
- No raise to FY2017's accounting rate of return
- Operating expenses are starting to increase with 10 percent year-over-year growth and expected to accelerate by 14 percent year-over-year in the future.
- This was the first quarter without net subscriber adds
MacMillan believed the company's earnings power will be "key to stock performance over the next year." Although digital marketing continues to remain under pressure due to "perpetual comps," this won't impact the strong projected earnings over the next 12 months.
At the time of writing, Adobe traded at $94.95, down 4.78 percent Wednesday.
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