Adobe Systems "sector perform," target price reduced

05/30/06 - RBC Capital Markets

NEW YORK, May 30 (newratings.com) - Analysts at RBC Capital Markets reiterate their "sector perform" rating on Adobe Systems (ADBE), while reducing their estimates for the company. The target price has been reduced from $40 to $36.

In a research note published this morning, the analysts mention that the company has projected its EPS and revenues for the current quarter at the low end of its guidance range due to the weak sales during the spring holiday season. According to the analysts, large enterprise customers are holding out purchases until the release of Adobe Systems' Acrobat 8 and Creative Suite 3 products, which are expected in F4Q06 and F2Q07, respectively. The EPS estimates for FY06 and FY07 have been reduced from $1.28 to $1.26 and from $1.46 to $1.42, respectively.