On Thursday, BMO Capital Markets adjusted its outlook on Adobe (NASDAQ:ADBE), reducing the stock's price target from $600.00 to $570.00. Despite the downward revision in the target price, the firm maintains an Outperform rating on the shares.
According to InvestingPro data, Adobe currently trades at $549.93, with analyst targets ranging from $440 to $704.55, reflecting diverse market opinions on this $242 billion software giant.
The adjustment follows the release of several metrics that BMO Capital found unsatisfactory in Adobe's recent quarterly report. The firm had anticipated a net new Annualized Recurring Revenue (ARR) guide of approximately $1.9 billion. However, they expected additional ARR upside within the quarter, which did not materialize.
Furthermore, BMO Capital did not foresee Adobe guiding revenues lower for Fiscal Year 2025 compared to current estimates. Another unexpected factor was the pricing strategy, which the firm thought would play a more significant role in driving growth for FY25.
Despite these concerns, BMO Capital continues to endorse Adobe with an Outperform rating. Their decision to maintain this positive stance is largely based on the company's valuation. Adobe's stock performance and future prospects will continue to be monitored by investors as they assess the impact of BMO Capital's revised expectations.
In other recent news, Adobe Inc. has been the subject of numerous analyst updates. DA Davidson has adjusted its outlook on Adobe, reducing the stock's price target to $625 from $685 while maintaining a Buy rating.
The firm cited Adobe's fourth-quarter fiscal year 2024 performance, surpassing expectations with revenue and earnings outperforming consensus estimates. Adobe's forecast for fiscal year 2025 indicated a revenue growth of approximately 9%, which DA Davidson views as conservative given Adobe's growth opportunities.
Stifel maintained a positive outlook on Adobe, reaffirming its Buy rating and $650 price target. The firm observed growing adoption of Adobe's Firefly, predicting that its increased use will enhance customer retention and raise the likelihood of future spending on more directly monetized versions of the tool.
TD Cowen also expressed confidence in Adobe shares, maintaining a Buy rating and a $625 price target. Despite some challenges in the SMB sector, the firm anticipates stronger performance in the mid-market and enterprise segments.
Citi updated its outlook on Adobe, reducing the price target from $616 to $590 while keeping a Neutral rating. The adjustment comes as Adobe faces potential revenue challenges ahead, compounded by broader economic and competitive pressures.
Lastly, BMO Capital Markets adjusted its outlook on Adobe, increasing the stock's price target to $600 while retaining an Outperform rating. The firm anticipates that Adobe will surpass its fourth-quarter net new Annualized Recurring Revenue guidance, with particular growth expected in the Document Cloud segment. These are the recent developments concerning Adobe Inc.
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