Stifel lowers Adobe stock price target to $480 on mixed outlook

Stifel lowered its price target on Adobe (NASDAQ:ADBE) stock to $480 from $525 while maintaining a Buy rating, following the company’s latest earnings report. According to InvestingPro data, Adobe’s current analyst targets range from $380 to $630, with the stock currently trading near $414. The company maintains impressive gross profit margins of 89.25%.

Adobe shares initially fluctuated after the earnings announcement before settling down 1.5%, according to Stifel analyst Parker Lane. The firm noted that investors appeared concerned about Adobe’s unchanged Digital Media ARR outlook, despite the quarterly beat and positive commentary across product categories. The company has demonstrated solid performance with revenue growth of 10.63% over the last twelve months.

The Business Pro + Consumer segment, which includes Express and Acrobat, showed approximately 1 percentage point acceleration quarter-over-quarter, reversing at least five quarters of deceleration. Stifel highlighted this as a positive indicator that Adobe’s efforts to enhance its Express product and increase market awareness are strengthening its position in the competitive non-Professional environment. InvestingPro analysis shows Adobe maintains a "GOOD" overall financial health score, with particularly strong profitability metrics.

Adobe also disclosed that its standalone AI annual recurring revenue is exceeding expectations, tracking ahead of its $250 million end-of-year target. Stifel views this as a positive signal of Adobe’s ability to drive adoption and monetization across its various generative AI tools and packages. For deeper insights into Adobe’s AI initiatives and financial metrics, check out the comprehensive Pro Research Report available on InvestingPro, which covers 12+ exclusive ProTips and detailed financial analysis.

Despite the price target reduction, Stifel maintained its Buy rating on Adobe stock, suggesting continued confidence in the company’s long-term prospects despite near-term concerns about growth rates in certain segments. The company’s return on equity stands at 52%, demonstrating strong operational efficiency.

In other recent news, Adobe reported second-quarter results that exceeded analyst expectations, with total revenue reaching $5.87 billion, surpassing the consensus estimate of $5.80 billion. The company also achieved non-GAAP earnings per share of $5.06, above the expected $4.96. Adobe’s Digital Media annual recurring revenue (ARR) grew 12% year-over-year, and the company raised its fiscal year 2025 revenue and earnings per share outlook slightly. Despite these positive results, several firms have adjusted their price targets for Adobe. Mizuho (NYSE:MFG) lowered its target to $530 from $575, Oppenheimer to $500 from $530, and Stifel to $480 from $525, while all maintaining positive ratings on the stock. Goldman Sachs, however, maintained its Buy rating and a $570 price target, citing optimism in Adobe’s growth trajectory and AI innovations. JMP Securities reiterated a Market Perform rating, noting Adobe’s revenue growth and better-than-expected net new Digital Media ARR. Adobe’s AI initiatives, particularly in its Express platform, are viewed as promising by analysts, with Goldman Sachs highlighting the monetization potential of its AI products.

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