Credit Suisse remains Neutral-rated on Adobe Systems Incorporated ADBE despite better-than-expected first quarter results and solid guidance for the second quarter.
- Adobe Reports Q1 Adj. EPS $0.94 vs $0.87 Est., Sales $1.68B vs $1.65B Est.
- Sees Q2 Sales ~$1.73B vs $1.72B Est., Adj. EPS ~$0.94 vs $0.91 Est.
Digital Media ARR rose 36 percent to $4.252 billion and waswell ahead of consensus/guidance, as strength in the SMB segment, continued growth in Adobe Stock, and solid customer retention drove Creative Cloud ARR by 37 percent to $3.759 billion.
Justification For Neutral Rating
“While we continue to view ADBE's stack of digital media and digital marketing assets positively, we remain concerned about near-term valuation risk as we believe that the current premium valuation of the shares already reflects most, if not all, of the company's expected growth trajectory,” analyst Michael Nemeroff wrote in a note.
Nemeroff raised his F2017 revenue estimate to $7.159 billion from $7.091 billion, and EPS view to $3.91 from $3.75. Nemeroff also raised his price target to $125 from $105.
At last check, shares of Adobe rose 5.37 percent to $128.92 after setting a new 52-week high of $130.30.
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