On Wednesday, TD Cowen maintained its Hold rating on Adobe stock (NASDAQ:ADBE), with a steady price target of $490.00. The firm’s analysis followed Adobe’s Summit Conference and Analyst Day held in Las Vegas, where the company’s growth strategy, new key performance indicator (KPI) disclosures, and additional details on artificial intelligence (AI) monetization were presented. The company, which boasts impressive gross profit margins of 89% and revenue growth of 10.5% over the last twelve months, did not release any new financial targets during the event. According to InvestingPro data, analysts’ price targets for Adobe currently range from $390 to $650.
TD Cowen’s analyst expressed optimism about Adobe’s potential for customer cohort growth and the increased transparency around AI monetization strategies. However, the firm is looking for more substantial developments in the monetization of Adobe’s generative AI (GenAI) and effective execution across various customer cohorts before considering a higher valuation multiple for the company. InvestingPro analysis indicates Adobe maintains a strong financial health score, though 18 analysts have recently revised their earnings expectations downward for the upcoming period.
Adobe shares have experienced a decline of 11% since the announcement of its first-quarter results on March 12th, with the stock now trading near its 52-week low. Currently, the stock trades at a P/E ratio of 25.6x and approximately 17 times its expected enterprise value to free cash flow (EV/FCF) for the calendar year 2026. Based on comprehensive InvestingPro Fair Value analysis, Adobe appears undervalued at current levels. TD Cowen suggests that while Adobe’s valuation is nearing what could be considered a low point, improvements in overall growth trends are necessary to support a more robust valuation framework.
In summary, TD Cowen reaffirmed their Hold position on Adobe, maintaining the price target of $490. The firm’s stance reflects a wait-and-see approach, monitoring Adobe’s progress in implementing its growth strategies and realizing the potential of AI-driven revenue streams before any potential adjustment in stock valuation. For deeper insights into Adobe’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which includes detailed analysis of the company’s financial health, valuation metrics, and growth potential.
In other recent news, Adobe has been the focus of several analyst updates following its Summit and financial analyst day. BMO Capital Markets reiterated its Outperform rating with a $495 price target, emphasizing Adobe’s strategic clarity and growth potential. BofA Securities maintained a Buy rating with a $528 target, noting Adobe’s significant AI-driven revenue and user growth, particularly for its Acrobat product, which has reached 650 million monthly active users. Piper Sandler expressed confidence in Adobe by keeping an Overweight rating with a $600 price target, citing Adobe’s consistent subscription growth and undervaluation compared to large-cap peers. Conversely, KeyBanc Capital Markets reiterated an Underweight rating with a $390 target, pointing out that while Adobe’s AI initiatives are promising, their financial impact needs to grow significantly. Stifel also maintained a Buy rating with a $525 target, highlighting Adobe’s focus on user acquisition and the expansion of its AI capabilities, which could potentially lead to increased revenue. These developments reflect a mix of optimism and caution among analysts regarding Adobe’s future financial performance and strategic direction.
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