Impressive Upside in Adobe's Digital Media Segment, Analyst Says

TD Cowen's J. Derrick Wood raised their price target on Adobe (NASDAQ: ADBE) by 5% from $600 to $630 on 2023/09/15. The analyst maintained their Buy rating on the stock.

Wood's optimistic outlook on Adobe's Digital Media segment was highlighted in their note assessing the company's Q3 2023 performance. According to Wood, the upside in this segment was "impressive," and they characterized Adobe as "an obvious AI winner." The analyst's assessment comes on the heels of Adobe's recent launch of four new generative AI products after a six-month beta testing period.

Wood was not the only analyst to update their rating and price target for Adobe on September 15, 2023. Citigroup's Tyler Radke raised their price target by 7% from $570 and maintained their Hold rating on the stock. Baird's Rob Oliver also raised their price target by 8% from $500 and maintained their Hold rating. Barclays's Saket Kalia raised their price target by 3.2% from $620 and also maintained their Hold rating.

Overall, 66.7% of top-rated analysts currently rate Adobe as a Strong Buy or Buy, while 33.3% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

Looking ahead, analysts forecast that Adobe's upcoming year will deliver earnings per share (EPS) of $12.87. If these predictions hold true, Adobe's next yearly EPS will be up by 22.5% on a year-over-year basis.

In terms of stock performance, Adobe's shares have experienced a 4.2% decline since the company's latest quarterly report on September 14, 2023. However, when compared to the same period last year, the stock is up a remarkable 71.1%. Adobe's performance has outpaced the S&P 500, which has seen a 14.1% increase during the same timeframe.

J. Derrick Wood, the TD Cowen analyst who provided the updated rating and price target, is ranked in the top 2% of Wall Street analysts by WallStreetZen. With an average return of 16.9% and a win rate of 62.3%, Wood specializes in the Communication Services and Technology sectors.

Adobe Inc. operates as a diversified software company with a global presence. The company operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. Its Digital Media segment offers products, services, and solutions that empower individuals, teams, and enterprises to create, publish, and promote content. Adobe's flagship product is Creative Cloud, a subscription service that provides access to various creative products. The Digital Experience segment provides an integrated platform and applications to help brands and businesses create, manage, execute, measure, monetize, and optimize customer experiences. The Publishing and Advertising segment offers a range of products and services, including e-learning solutions, technical document publishing, web conferencing, and high-end printing, as well as Advertising Cloud offerings. Adobe distributes its products and services directly to enterprise customers through its sales force, field offices, app stores, and website. Additionally, the company partners with distributors, value-added resellers, systems integrators, and other channels to reach end users. Headquartered in San Jose, California, Adobe Inc. was founded in 1982.

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