Citibank’s equities research team (NYSE: C) has reiterated its buy rating on Adobe Systems (NASDAQ: ADBE) and its price target for the company of $46.00.
Citi analyst says, “Shares have a history of selling post launch. Strong releases have been less severe (CS3 = 6% relative decline over 8 wks). We’d encourage investors take advantage of weakness as we expect sell-off to be shortlived. We continue to believe the CS5 cycle will generate upside to numbers in the May quarter and beyond driving our $46 price target…”
Citigroup increased its price target from $42.00 to $46.00 on March 24th.
On March 24th, Citigroup said, “Positive Acrobat and Enterprise trends appear sustainable to us as they have gradually turned positive. Inflection is corroborated by other data points pointing towards improvement in enterprise IT where stability in enterprise spending likely drove strength above what we were expecting…Flow-through strength in Acrobat and Enterprise combined with greater confidence in CS demand drive our FY10 revenue higher by 3% in FY10 and FY11 by 2%. Our FY10 EPS increases by $0.02 and FY11 is unchanged as improved cost controls are offset by lower other income and higher tax rate…We are raising our price target to $46 based on higher forward 12-month EPS of $2.00 (same 23x multiple). Inside we show the assumptions behind our base, upside, and downside cases. We outline a “best case” scenario where forward 12-month EPS could be $2.16, driving this target 8% higher.”
Separately, UBS raised its price target on Adobe from $43.00 to $45.00 on March 24th.
