Adobe Systems upgraded to overweight at Morgan Stanley on product cycles

BOSTON, Jun 24, 2008 (Thomson Financial via COMTEX) -- MS | Quote | Chart | News | PowerRating -- Adobe Systems Inc. was upgraded Tuesday to overweight from equal-weight at Morgan Stanley, which said the company stands to benefit from some of the "most durable" drivers in software long term, while near-term product cycles should accelerate growth beyond consensus in fiscal 2009.

"We believe consensus is underestimating the upcoming Creative Solutions product cycle," analyst Adam Holt said in an note to clients. Holt assumed coverage of Adobe with a $51 price target. "We size the opportunity at $7.5 billion versus the $2.5 billion in consensus - leaving material room for upside."

Morgan Stanley said Adobe is at the crossroads of numerous secular drivers that should propel more than 10% revenue growth.

The broker estimates 2008 earnings of $1.95 a share and 2009 earnings of $2.23 a share. Analysts polled by Thomson Reuters, on average, estimate 2008 earnings of $1.95 a share and 2009 earnings of $2.19 a share.

Shares of Adobe, a San Jose, Calif.-based business software provider, closed Monday at $40.37. Greg Saulnier gs/pc

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