Jefferies said Adobe Systems Inc. (NASDAQ: ADBE) used its Analyst Day to outline major changes to its business model, product portfolio and technology focus.

Adobe is making big changes to its business model (subscriptions), its product portfolio (the Creative Cloud) and its core technology focus (HTML5) to drive consistent double-digit growth with higher recurring revenue and consistent operating margins. If Adobe executes with no more negative surprises, we believe the stock has good upside, said Ross MacMillan, an analyst at Jefferies.

MacMillan said the downside is that growth in fiscal 2012 will be lower than expected (4 percent to 6 percent versus previous 9 percent estimate) predominantly as the company moves from lower growth and /less profitable Enterprise business.

He senses some investors remain concerned that Adobe could hit them with further surprises on growth/operating margins as the shifts unfold over coming quarters. But if management's framework is correct, Adobe stock has good upside, in his view.

Adobe's management reiterated its fourth quarter guidance. For fiscal 2012, the 4 percent to 6 percent revenue growth guidance reflects about $190 million revenue shortfall -- about $150 million (4 percentage points of growth) related to the shift away from some Enterprise business and about $40 million (1 percentage points of growth) from the incremental move to subscription.

MacMillan said operating margins are expected to be flat year-over-year, with the revenue shortfall being met with cost reductions. Adobe targets double-digit growth and flat operating margin for beyond fiscal 2012 with recurring revenue increasing to 40 percent by fiscal 2015. Creative and Acrobat is expected to grow about 10 percent and Digital Marketing more than 20 percent.

Adobe believes it can drive $380 million incremental subscription revenue in Creative by adding 800,000 new users at $40 a month by fiscal 2015. Adobe believes revenues can grow more than 20 percent in digital marketing to drive to $1 billion in fiscal 2015.

Adobe's management believes operating margins can be maintained beyond fiscal 2012, despite the shift to more subscription revenues. HTML5 is a major retooling opportunity for the Creative franchise. Adobe will adjust upgrade pricing with Creative Suite 6 (and potentially list prices) resulting in higher average selling prices, in MacMillan's view.

The brokerage maintained a buy rating on shares of Adobe with a price target of $35.

Adobe stock closed Wednesday's regular trading down 7.69 percent at $28.08 on the NASDAQ Stock Market, while in the after-hours, the stock further slid 0.64 percent to $27.90.

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