June 5, 2008 / 3:08 PM / 10 years ago

UPDATE 1-RESEARCH ALERT-Cowen downgrades Adobe Systems

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June 5 (Reuters) - Cowen & Co downgraded Adobe Systems Inc (ADBE.O), the maker of Photoshop, Flash and Illustrator software, to “neutral” from “outperform,” and said it believes the company’s growth rate will remain in the lower double digits and the shares are fairly valued in the current range.

Shares of the company fell 1.15 percent to $43.75 in morning trade Thursday on Nasdaq.

The brokerage said that the cycle of Creative Suite 4 (CS4), a next generation design software suite, looked bearish as many of the drivers of growth of CS3 were not available and in some cases work against the CS4. The CS4 suite includes Photoshop and Illustrator.

Cowen analyst Walter Pritchard said Adobe’s new services and platform will take years to become meaningful drivers of growth.

However, the brokerage expects Adobe to report strong quarterly results for the current quarter and increased its outlook for second-quarter earnings to $1.93 from $1.90. (Reporting by Kuganandhan Paramanandan in Bangalore; Editing by Pratish Narayanan)

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