) to hold from buy.
Analyst Mark Schappel says the downgrade is based on his belief that: Adobe is trading above its peer group average, toward the upper end of its historical range; investors are likely to focus increasingly on enterprise software stocks as we approach the seasonally strong December quarter; and Adobe is facing more difficult year-over-year comparisons during the next 12 months. As a result, he expects Adobe to trade within a tight range over the near- to mid-term. Despite the downgrade, he thinks Adobe has a key franchise in markets it serves. Schappel kept his $1.72 fiscal 2004 (ending November) and $1.65 fiscal 2005 EPS estimates.