Piper Sandler maintains Adobe stock at Overweight with $600 target

Published 19/03/2025, 14:56
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On Wednesday, Piper Sandler showed confidence in Adobe (NASDAQ:ADBE) by maintaining an Overweight stock rating with a steady price target of $600.00. The firm’s analysts highlighted Adobe’s solid product trajectory, including the introduction of new AI agents, orchestration tools, and an expanding library of models aimed at integrating creative and marketing stacks. According to InvestingPro data, Adobe maintains impressive gross profit margins of 89% and has demonstrated strong financial health with an overall score of "GOOD."

Despite a 23% decline in Adobe shares over the past six months, in contrast to the S&P 500’s flat performance, Piper Sandler believes the company is underappreciated and undervalued. Adobe’s consistent subscription growth, ranging between 10.5% and 12.9% for 11 consecutive quarters, supports this view. The firm notes that Adobe’s current valuation at 17 times its estimated calendar year 2026 enterprise value to free cash flow (EV/FCF) is nearly half the large-cap median of 33 times.

The analysts underscored insights from management during the 2025 investor day, indicating that two years of developments from the Firefly project, along with platform extensions for web and mobile—which account for over 50% of monthly active users (MAUs)—are setting the stage for a new phase of sustainable double-digit earnings per share (EPS) growth.

Piper Sandler’s stance on Adobe remains positive despite an increasingly uncertain macroeconomic environment. The analysts argue that there is limited downside risk to the company’s valuation multiple, suggesting a strong investment potential for Adobe stock according to their analysis.

In other recent news, Adobe has been in the spotlight with several key developments. Stifel analysts reiterated their Buy rating on Adobe, setting a price target of $525, following insights shared at Adobe’s annual Summit conference. The company emphasized its focus on user acquisition and the integration of new AI technologies across its product suite, including the Firefly app and other generative AI solutions, which are expected to enhance product offerings and potentially boost revenue. Meanwhile, KeyBanc maintained an Underweight rating with a $390 target, highlighting Adobe’s AI-driven initiatives, which reported a $125 million AI standalone Annual Recurring Revenue as of the first quarter of 2025.

Adobe also announced a private preview of its Adobe Marketing Agent for Microsoft (NASDAQ:MSFT) 365 Copilot, which aims to streamline marketing tasks and enhance cross-team collaboration. This initiative is part of Adobe’s ongoing collaboration with Microsoft to integrate generative AI into workplace applications. In another strategic move, Adobe and Publicis Groupe (EPA:PUBP) expanded their partnership to integrate Adobe Firefly into Publicis’s CoreAI system, aiming to revolutionize personalized content production and digital customer engagement.

These developments underscore Adobe’s commitment to leveraging AI to enhance its offerings and collaborations. The company continues to focus on expanding its AI capabilities and strategic partnerships, which are anticipated to drive future growth and efficiency in content production and marketing strategies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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