Adobe Stock (ADBE) in Focus as Citi Flags Mixed Outlook for Q2 Earnings

Adobe (ADBE) is attracting investor attention ahead of its upcoming Q2 earnings report, set for June 12. While the software giant remains a key player in the creative and digital experience space, Citi analysts flagged a mix of positives and lingering concerns that could weigh on near-term performance. Notably, Citi’s four-star analyst Tyler Radke maintained a Hold rating on the stock but raised the price target from $430 to $465, reflecting a cautiously optimistic stance.

What to Expect from Adobe’s Q2 Earnings

Wall Street forecasts Adobe to deliver earnings of $4.97 per share, marking an approximate 11% increase year-over-year. Meanwhile, revenue is projected to reach $5.80 billion, up from $5.31 billion reported in the same quarter last year.

At the heart of Adobe’s stock pressure are rising concerns over potential AI disruption. Specifically, investors worry that generative AI tools could render Adobe’s core creative software less essential for designers and content creators. While Adobe has made strides in embedding AI into its digital experience offerings, the company’s slower-than-expected sales growth has dampened investor confidence and added to the uncertainty surrounding its future competitiveness. Year-to-date, ADBE stock has gained over 6%.

Citi’s Views on Adobe Before Q2 Earnings

Citi noted a “mixed outlook” ahead of the company’s fiscal Q2 earnings. According to the firm, Adobe is losing market share in Creative Cloud as it attempts to offset weaker monetization in the broader market by raising prices for its core creative professionals—driven in part by AI enhancements. Competition from freemium tools like Canva is intensifying, especially among casual users.

However, Citi also highlights strong web traffic and encouraging feedback from partners in Adobe’s Digital Experience segment, signaling ongoing enterprise momentum. The firm believes Adobe’s stock is likely to remain range-bound until it shows clearer improvement in Creative Cloud performance or begins to generate meaningful revenue from AI tools.

Is Adobe Stock a Good Buy Now?

According to TipRanks, ADBE stock has received a Moderate Buy consensus rating, with 21 Buys and eight Holds assigned in the last three months. The average Adobe stock price target is $519.88, suggesting a potential upside of 25% from the current level.

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