Adobe Analyst Raises Price Target by 8% Following Solid Q3 Performance

Baird's Rob Oliver raised their price target on Adobe (NASDAQ: ADBE) by 8% from $500 to $540 on 2023/09/15. The analyst maintained their Hold rating on the stock.

Oliver's decision to revise the price target came after Adobe reported a "solid" performance in Q3 2023, surpassing expectations in both revenue and profitability. The company reported earnings per share (EPS) of $4.09, beating the Zacks Consensus Estimate of $3.97 and showing a 20.3% increase compared to Q3 2022. Revenues for the quarter reached $4.89 billion, roughly in line with the Zacks Consensus Estimate and marking a 10.4% increase year-over-year.

The analyst also highlighted Adobe's earlier announcements regarding several artificial intelligence (AI)-related updates around Firefly and Creative Cloud. These innovations are expected to enhance creativity and expand the company's product portfolio, making Adobe's software more accessible to millions of users worldwide.

Looking ahead, Adobe's management provided guidance for Q4 2023, forecasting an EPS range of $4.10 to $4.15 and revenue between $4.98 billion and $5.03 billion. CEO Shantanu Narayen expressed enthusiasm about the company's ability to unleash a new era of AI-enhanced creativity, fueled by the recent launches of Firefly, Express, Creative Cloud, and GenStudio.

In addition to Baird's Rob Oliver, other analysts also updated their ratings on Adobe on September 15, 2023. Citigroup's Tyler Radke raised their price target by 7% to $570 and maintained a Hold rating on the stock. Barclays' Saket Kalia raised their price target by 3.2% to $620, also maintaining a Hold rating. Wells Fargo's Michael Turrin raised their price target by 4% to $625 while maintaining a Strong Buy rating.

Currently, 66.7% of top-rated analysts view Adobe as a Strong Buy or Buy, while 33.3% consider it a Hold. No analysts recommend selling the stock. The consensus forecast among analysts is that Adobe's upcoming year will deliver an EPS of $12.87, representing a 22.5% increase on a year-over-year basis.

Following Adobe's latest quarterly report on September 14, 2023, the stock price has experienced a 4.2% decline. However, looking at the bigger picture, the stock has shown a significant year-over-year increase of 71.1%. During this period, Adobe has outperformed the S&P 500, which has seen a 14.1% increase.

Rob Oliver, the analyst behind the recent price target revision, is ranked in the top 11% of Wall Street analysts by WallStreetZen. With an average return of 6.8% and a win rate of 59.8%, Oliver specializes in the Communication Services, Consumer Defensive, and Technology sectors.

Adobe Inc. is a global software company that operates in three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products and services that empower individuals, teams, and enterprises in content creation, publication, and promotion. Its flagship product, Creative Cloud, provides a subscription service for accessing creative tools. The Digital Experience segment provides an integrated platform and applications for creating, managing, executing, measuring, monetizing, and optimizing customer experiences. The Publishing and Advertising segment offers various products and services, including e-learning solutions, technical document publishing, web conferencing, and high-end printing. Adobe serves a wide range of customers, including content creators, marketers, advertisers, agencies, publishers, and developers. The company was founded in 1982 and is headquartered in San Jose, California.

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