Neutral on Adobe Systems (ADBE) - Broadpoint AmTech Report
December 03, 2009 2:40 PM
A recent research report published by Broadpoint AmTech has expressed neutral signs on Adobe Systems (NASDAQ: ADBE). According to analyst Yun Kim, the price of the stock fully reflects current state of business, which remains largely stable.
Shares of Adobe Systems currently trade at 22 times the earnings (CY10 earnings estimate) versus
the industry average of 19.
The financial benefit of the upcoming CS5 launch by Adobe Systems will be visible in April 2010. However, this positive point is offset by what the analyst believe to be sizable execution and integration risks associated with its OMTR acquisition.
With Adobe continuing to show strong cost controls, the report expect company’s margins and earnings to show modest upside to the consensus estimates.
According to report, Adobe is likely to be one of the first software names to benefit when the economy finally turns positive. However, lack of visibility in its business due to very little recurring revenue can be a deterrent to stocks performance.
