September looms as a risk month for stocks, Yardeni says
Investing.com - UBS lowered its price target on Adobe (NASDAQ:ADBE) to $400 from $430 while maintaining a Neutral rating ahead of the company’s third-quarter earnings report scheduled for September 11. The software giant, currently valued at $151 billion, has maintained impressive gross profit margins of 89% while delivering 10.6% revenue growth in the last twelve months.
The price target reduction comes after UBS analyst Karl Keirstead consulted with customers and partners to assess current demand trends for Adobe products.
UBS noted that while medium-term artificial intelligence risks are likely to persist for Adobe, near-term demand and usage of the company’s products appear to be "holding up relatively well."
Based on these findings, UBS reaffirmed its fiscal year 2025 estimates for Adobe despite the price target reduction.
The firm calculated that Adobe trades at a calendar year 2026 free cash flow multiple of approximately 15x, leading UBS to conclude it doesn’t "see material remaining downside" for the stock.
In other recent news, Adobe has seen a mix of analyst ratings and market developments. RBC Capital has maintained its Outperform rating on Adobe, with a price target of $480.00, despite acknowledging increased competition in the creative tools market. Conversely, Melius Research downgraded Adobe to Sell, citing concerns over AI’s impact on the software-as-a-service model, with a new price target of $310.00. Redburn-Atlantic also downgraded Adobe to Sell, reducing the price target from $420.00 to $280.00, as generative AI tools are seen as eroding Adobe’s competitive edge.
In a more positive note, DA Davidson reiterated its Buy rating with a $500.00 price target, highlighting the growth of Figma, which reported $821 million in revenue over the past twelve months. This represents a 48% year-over-year increase, with 18% non-GAAP operating margins. Meanwhile, Citizens JMP maintained its Market Perform rating on Adobe amid news that competitor Canva plans to acquire MagicBrief, an AI-powered ad platform. These developments reflect the dynamic landscape Adobe operates in, with varying analyst perspectives and competitive challenges.
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