Adobe
stock was getting another boost early Friday after the company raised its fiscal-year outlook and championed its prospects to “lead the new era of generative AI.”
A number of analysts hiked their price targets on the stock after the company’s earnings but some feel it’s time to move to the sidelines, as much of the AI upside already has been priced in.
The stock has climbed around 40% over the past month. The company recently announced plans to charge commercial customers for its Firefly software, which enables content creators to turn text into images, audio, illustrations, videos and 3-D images.
Adobe
shares rose 3.3% higher to $507 in premarket trading Friday.
D.A. Davidson analyst Gil Luria said
Adobe
(ticker: ADBE) delivered a “solid beat and raise quarter” and that its generative AI products were “impressive” and competitive, with its established user base giving it broader market reach. But he maintained a Neutral rating on the stock, with a target price of $500, implying a 2% upside to the closing price Thursday.
“All in, we are encouraged by Adobe’s positioning in the emerging AI era, but we believe the near-term upside is reflected on [the] recent 35%+ move in the shares, keeping us Neutral rated,” Luria said.
Analysts at Oppenheimer, who rate the stock at Perform, said in a research note the company “continues executing well amidst a challenging operating environment for front-office suppliers,” and that “investor enthusiasm is high for the company’s AI positioning.”
“We carry a favorable view of management’s execution and Adobe’s future, but think the stock projects a balanced risk/reward profile at current levels,” Oppenheimer added.
RBC Capital Markets analysts were more bullish, raising their price target on Adobe to $555 from $460. “We continue to feel the strategic alignment of creative and experience has never been better,” they said, raising estimates following the company’s earnings.
Piper Sandler raised its price target to $572 from $500, keeping an Overweight rating on the stock, while J.P. Morgan raised its target to $490 from $450, sticking to a Neutral rating, according to the Fly. Goldman Sachs, which has a Buy rating on the shares, lifted its price target to $550 from $480.
Analysts on Wall Street have an average target price of $456.83 on the stock, according to FactSet data, suggesting a 7% fall from Thursday’s price. Of those covering the stock, 53% rate it Buy and 47% have a Hold rating.
Write to Callum Keown at [email protected]
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