Baird upgraded Adobe Systems (ADBE ) to outperform from neutral.
The software maker posted 20 cents first quarter earnings per share (GAAP). Analyst Steven Ashley says Adobe defied the sluggish economy, and reported better-than-expected results. It looks like business has now stabilized. Ashley says the guidance was in line, but he was more impressed with Adobe's confidence in its guidance. He thinks a series of important new product introductions/upgrades should drive revenue growth over the next four quarters. The new segmented Acrobat products are expected to ship late in the second quarter, and the Illustrator upgrade is planned in the third quarter. The Photoshop upgrade is expected late in the fourth quarter, or the first quarter of fiscal 2004 (Nov). Ashley raised his $1 fiscal 2003 earnings per share estimate to $1.07, upped the $1.20 fiscal 2004 estimate to $1.25; and raised the $30 target to $36.