Adobe Inc’s stock, under the ticker symbol ADBE on NASDAQ, witnessed a staggering 14.2% dip, falling to $489.38 on Friday following the company’s fiscal first-quarter earnings report.
In the midst of an eventful earnings season, here’s what three noteworthy analysts had to say about Adobe’s performance:
- Stifel analyst Parker Lane maintained a Buy rating, lowering the price target from $650 to $625.
- JPMorgan analyst Mark Murphy retained a Neutral rating, adjusting the price target from $600 to $570.
- Goldman Sachs analyst Kash Rangan reiterated a Buy rating with a price target of $640.
Explore more analyst stock ratings to get a comprehensive view.
Stifel’s Perspective: Despite a “relatively clean” first-quarter report, Lane mentioned that disappointment loomed over Adobe due to guidance concerning net new Digital Media ARR. This, in turn, led to skepticism among investors regarding the achievability of full-year targets.
The analyst noted, “Despite ongoing innovation and positive feedback on the generative AI potential, investors craving the AI promise find Adobe’s timeline on new solutions benefitting more in the second half of 2024 insufficient.” Adobe is anticipated to shed light on its generative AI plan during its upcoming annual Summit conference.
JPMorgan’s Evaluation: Murphy highlighted that Adobe’s earnings call reinforced the notion that several growth catalysts, such as pricing changes and GenAI credit tailwinds, would likely have a more pronounced impact in the latter part of the year, indicating favorable ARR trends towards the end of the fiscal period.
He also mentioned, “Transitioning the growth baton from Creative Cloud to Document Cloud at an accelerated pace compared to expectations showcases Adobe’s commitment to evolving product offerings.”
Goldman Sachs’ Analysis: Rangan pointed out, “Despite exceeding Consensus on Digital Media Net New Annual Recurring Revenue (DM NNARR), the stock experienced an -11% downturn in after-hours trading.” The decline was attributed to doubts surrounding Adobe’s ability to meet its full-year Digital Media net new annual recurring revenue target of $1.9 billion.
However, Rangan expressed confidence that Adobe could surpass the DM NNARR goal for 2024, driven by sustained product adoption and pricing adjustments.
Dive Deeper: Biden Awards Intel With CHIPS Act Accolade, Reinforcing Arizona’s Position as a Semiconductor Hub
Image Source: Shutterstock
