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Investing.com - Mizuho has lowered its price target on Adobe (NASDAQ:ADBE) to $460 from $530 while maintaining an Outperform rating ahead of the company’s fiscal third-quarter results expected this Thursday. The software giant, currently valued at $148 billion, has seen its stock trading near its 52-week low of $330.04.
The research firm reports mixed signals in its checks, noting strong enterprise activity with robust large-deal momentum during the quarter, while web traffic growth continues to struggle despite a slight uptick in unique visitor trends.
Mizuho expects Adobe to deliver modest upside to total revenue and slight Digital Media Annual Recurring Revenue (ARR) upside, while reiterating its fiscal year 2025 ARR guidance of 11% year-over-year growth on a constant currency basis.
The firm highlighted that Adobe is beginning to meaningfully monetize its Generative AI innovations, and a recent price increase will contribute positively to results, making the fiscal year 2025 ARR and revenue guidance appear achievable despite tough competition and ongoing macroeconomic uncertainty. For deeper insights into Adobe’s financial health and growth prospects, InvestingPro subscribers can access 13 additional ProTips and comprehensive valuation metrics in our detailed Pro Research Report.
Mizuho finds Adobe’s valuation "very attractive" at approximately 14 times calendar year 2026 estimated free cash flow, despite acknowledging that the stock has been "incredibly frustrating" for investors over most of the past 12 months. Trading at a P/E ratio of 22.24, InvestingPro’s Fair Value analysis suggests Adobe is currently undervalued, aligning with Mizuho’s assessment.
In other recent news, Adobe’s financial outlook and market position have been under scrutiny by various analyst firms. DA Davidson reaffirmed its Buy rating on Adobe, citing robust growth from Figma, which reported $821 million in revenue over the last twelve months, marking a 48% year-over-year increase. Meanwhile, UBS adjusted its price target for Adobe to $400 from $430, maintaining a Neutral stance due to concerns about AI risks affecting demand for Adobe products. Rothschild Redburn reiterated a Sell rating with a $280 price target, expressing concerns over Google’s new AI tools potentially impacting Adobe’s Photoshop. Melius Research also downgraded Adobe from Hold to Sell, setting a $310 price target, highlighting the threat AI poses to Adobe’s software-as-a-service model. On a more positive note, RBC Capital maintained its Outperform rating with a $480 price target, despite acknowledging increasing competition in the creative tools market. These recent developments reflect the varied perspectives among analysts regarding Adobe’s future amid evolving market dynamics.
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