Adobe Systems Inc. (NASDAQ: ADBE) is set to release its fiscal fourth-quarter earnings report after the markets close on Thursday. The consensus estimates from Thomson Reuters are $0.86 in earnings per share (EPS) and $1.59 billion in revenue. In the same period of last year, Adobe posted EPS of $0.62 and $1.31 billion in revenue.
In a recent report, Credit Suisse said that it believes that Adobe’s second-quarter results and guidance are good but not great enough for its premium valuation. Despite the outperformance last quarter, management just reiterated its prior fiscal 2016 annual marketing cloud growth of over 20%. While the firm believes Adobe’s results and fiscal fourth-quarter guidance generally were good, just meeting expectations may not be enough for a large-cap software stock that trades at such a premium valuation, in its view.
That said, Credit Suisse continues to have a positive view on Adobe’s industry-leading stack of digital media and digital marketing assets, large market opportunity and skilled management team. However, the firm believes the current premium valuation on the stock already reflects the existing growth trajectory, but it sees a lack of near-term catalysts that would justify further multiple expansion beyond current levels.
Prior to the release of the earnings report, a few other analysts also weighed in on Adobe:
- Cowen reiterated a Buy rating.
- BTIG Research reiterated a Neutral rating.
- Deutsche Bank reiterated a Buy rating with a $125 price target.
- Pacific Crest reiterated a Buy rating with a $122 price target.
- Wunderlich reiterated a Hold rating with a $115 price target.
- Oppenheimer reiterated a Market Perform rating.
So far in 2016, Adobe has performed about in line with the broad markets, with the stock up 13%.
Shares of Adobe were trading at $106.07 on Wednesday, with a consensus analyst price target of $120.92 and a 52-week trading range of $71.27 to $111.09.
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