Adobe price target raised to $500 from $450 at DA Davidson

DA Davidson raised its price target on Adobe stock (NASDAQ:ADBE) to $500 from $450 on Friday, while maintaining a Buy rating following the company’s better-than-expected fiscal second-quarter results. According to InvestingPro data, Adobe currently trades at $413.68, with analyst targets ranging from $380 to $630. The company’s impressive gross profit margins of 89% and strong financial health metrics suggest potential upside, with InvestingPro’s Fair Value analysis indicating the stock is currently undervalued.

The research firm cited Adobe’s increased pipeline visibility into the second half of fiscal 2025, which gave management confidence to modestly raise the full-year guidance excluding foreign exchange impacts and the earnings beat. The company has demonstrated solid performance with revenue growth of 10.5% and maintains a healthy return on equity of 47%.

DA Davidson noted that Adobe’s artificial intelligence contributions are tracking above internal expectations as the company continues to embed generative AI throughout its product suite.

The new $500 price target represents a multiple of 22 times the firm’s fiscal 2026 earnings per share estimate for Adobe.

DA Davidson also announced it will host a fireside chat with Adobe’s CFO Dan Durn and Steven Day, CFO of the Digital Experience Business, on June 18 at 1 PM Eastern Time.

In other recent news, Adobe has reported impressive financial results for the second quarter of fiscal year 2025, with revenue reaching $5.87 billion, an 11% increase year-over-year. The company’s earnings per share (EPS) also surpassed expectations, hitting $5.06 compared to the anticipated $4.97. Adobe’s Digital Media net new annual recurring revenue exceeded forecasts, reaching $460 million, while Digital Experience subscription revenue grew by about 11% year-over-year. Evercore ISI maintained its Outperform rating on Adobe, acknowledging the company’s AI revenue targets are on track to surpass the $250 million fiscal year 2025 exit rate. Additionally, Adobe launched several AI-driven products and expanded its partner ecosystem, enhancing its leadership in the creative and marketing technology sectors. The firm also outlined a positive revenue outlook for fiscal year 2025, targeting between $23.5 billion and $23.6 billion. Despite these achievements, Adobe’s stock saw a slight decline in after-hours trading. The company remains optimistic about its future, with plans to continue leveraging AI to drive growth and innovation.

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