Check-Cap to merge with MBody AI in embodied AI workforce push
Investing.com - BofA Securities lowered its price target on Adobe (NASDAQ:ADBE) to $460 from $475 while maintaining a Buy rating on the stock. The software giant, currently valued at $148.7 billion, is trading near its 52-week low, with InvestingPro analysis suggesting the stock is undervalued at current levels.
The firm views Adobe’s third quarter as a "turning point," with positive growth metrics in both core offerings and new AI-first products. Supporting this view, Adobe maintains impressive gross profit margins of 89.25% and achieved 10.63% revenue growth in the last twelve months. BofA Securities noted that while these results may not completely resolve the "AI winner/AI loser debate," they should help position Adobe closer to being seen as an "AI beneficiary."
The research firm highlighted that Adobe stock currently trades at 15.0x CY26 FCF, suggesting limited downside risk. BofA Securities believes continued traction with AI-first products will likely drive reaccelerating growth for the company.
The firm projects that if Adobe maintains its current quarterly AI net new ARR run rate of $60 million, it could add an incremental 1 percentage point to topline growth in FY27, which BofA considers "material to a business growing 11%."
BofA Securities attributed the price target reduction to "multiple compression across the applications group," adjusting its valuation multiple to 19.5x FCF from the previous 20x FCF.
In other recent news, Adobe reported strong fiscal third-quarter results, surpassing expectations in several key areas. The company achieved non-GAAP earnings per share of $5.31, beating the consensus estimate of $5.18. Adobe also reached its $250 million annual recurring revenue target for AI-first products a quarter ahead of schedule. Additionally, Adobe’s Digital Media Revenue exceeded expectations by 2%, while Digital Experience Revenue was 1% above forecasts. The company reported an operating margin of 46.3%, higher than the expected 45.6%, and an 89% gross margin against a 90% consensus. Evercore ISI lowered its price target for Adobe to $450 from $475, citing growth concerns, but maintained an Outperform rating. KeyBanc reiterated its Sector Weight rating following the strong quarterly performance. Meanwhile, Goldman Sachs reaffirmed its Buy rating and $570 price target, highlighting Adobe’s outperformance across multiple metrics.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.