USB Piper downgraded Adobe (ADBE) to market perform from outperform.
Analyst C. Eugene Munster says PhotoShop upgrades historically create demand for the rest of the company's products; and notes that, while Photostop sales are strong, there's an incremental uptick only in some application produts. He thinks softness risk in application products could be compounded as PhotoStop moves through its version 7 upgrade cycle.
Munster says he would shift Adobe to market underweight on the potential for a sales slowdown due to lack of catalysts, softness in select products and summer trends in the company's business. He sees $0.97 fiscal 2002 (November) EPS, and $1.00 for fiscal 2003. He also cut his $42 target to $34.