Stock Picks: Adobe, Logitech

Plus Wall Street analyst opinions on Hewitt Associates and Synnex

Adobe Systems (ADBE)

Jefferies & Co. raises target price

Shares of Adobe Systems should have more room to climb following recently announced job cuts, Jefferies & Co. analyst Ross MacMillan said Nov. 11. Adobe, best known for its Photoshop, Flash and Acrobat graphics and publishing software, said afte the close of trading Nov. 10 it will cut 680 full-time positions to align costs with its fiscal 2010 budget. The cuts represent about 9% of its work force.

MacMillan estimates the savings will add about 15 cents to 20 cents to Adobe's full-year adjusted earnings per share. He bumped his price target for the company's stock up to $40 from $37.

Though he called the jobs announcement a surprise, MacMillan said he expects additional cuts at Omniture Inc., a software company headquartered in San Jose, Calif., that Adobe bought in October. Adobe, also based in San Jose, has already cut about 108 jobs at Omniture, or 9 percent of Omniture's work force.

The latest cuts will happen at its own operations, Adobe said. The cuts come almost a year after Adobe slashed 600 jobs, or 8 percent of its workers, because of slowing sales.

Logitech International (LOGI)

Standard & Poor's Equity Research reiterates hold

Logitech, a maker of peripheral equipment for PCs, said on Nov. 11 that it had agreed to acquire privately held LifeSize Communications of Austin (Tex.) for $405 million in cash. S&P equity analyst Thomas Smith said in a Nov. 11 note that the deal, if completed as planned in December, would add high-definition video communication capabilities to Logitech's offerings. In Smith's view, it would mark a move to a faster-paced adjacent market from the webcam market where Logitech is active.

Smith maintained his earnings per share (EPS) estimates of 29 cents for fiscal 2010 (ending March), and $1.00 for fiscal 2011. He kept his 12-month price target of $20.

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