Adobe Faces Price Target Adjustment from Piper Sandler
Piper Sandler’s Price Target Adjustment
Piper Sandler recently adjusted its price target for Adobe, bringing it down slightly to $700 from the previous $705. Despite this reduction, the firm maintains its Overweight rating on the stock. The adjustment came after Adobe reported a 15% increase in Annual Recurring Revenue and an 18% rise in EPS.
Strong Performance and Market Response
Adobe’s strong performance, fueled by robust enterprise demand, led to a significant boost in Remaining Performance Obligations growth and a $57 million revenue beat. However, the company’s tempered outlook for net new digital media ARR in the second quarter has raised concerns among investors, resulting in a more than 10% after-market sell-off of Adobe shares.
Piper Sandler’s Perspective and Recommendations
Piper Sandler believes that the market reaction may be exaggerated and refers to it as a “self-inflicted flesh wound.” The firm suggests that Adobe’s recent announcement of a $25 billion stock buy-back program could alleviate investor concerns. They encourage growth investors to seize the opportunity presented by Adobe’s stock dip before the upcoming Adobe Summit user conference in March 2024.
Anticipation for Adobe Summit
The Adobe Summit is expected to provide further insight into the company’s future prospects and strategy. Piper Sandler’s maintained Overweight rating reflects their positive outlook on Adobe’s stock despite the minor adjustment in the price target.
Conclusion
Overall, while Adobe faces some challenges in the market following the price target adjustment, Piper Sandler remains optimistic about the stock’s potential. Investors are advised to carefully consider the current market dynamics and upcoming events before making decisions regarding Adobe shares.
