Don't Expect Surprises Or Catalysts In the Short Term For Adobe

Goldman Sachs’ Heather Bellini believes there is a lack of catalysts that could drive the shares of Adobe Systems Incorporated (NASDAQ: ADBE) higher.

Bellini maintains a Neutral rating on the company, with a price target of $100.

What 2Q Holds In Store

The company is scheduled to report is F2Q16 results on June 21. The analyst expects the revenue to come in at the high end of the guidance, with the EPS close to the mid-point of the guidance range.

“Overall, we don’t expect any surprises on the upcoming print and note that Adobe has executed well on its transition,” Bellini stated.

Digital media ARR is expected to grow 5 percent quarter-on-quarter to $280 million, marginally above the guidance.

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However, digital media revenue is expected to come in slightly below the consensus expectations, with Adobe marketing cloud growing 17 percent, as compared to the FY16 target of 20 percent year-on-year.

Expense Trends

Bellini also focused on expense trends during the quarter, given the opex increased only 2 percent year-on-year during FY14 and FY15, although the guidance points to 14–15 percent growth for FY16.

Following the 14 percent opex growth reported for F1Q16, Bellini expects the company to report 10 percent growth for F2Q16.