Adobe’s Favorable Outlook: Strategic Pricing and EPS Growth Potential Drive Buy Rating

Morgan Stanley analyst Keith Weiss maintained a Buy rating on Adobe (ADBE – Research Report) today and set a price target of $510.00.

Keith Weiss’s rating is based on a combination of factors that suggest a favorable outlook for Adobe’s stock. Despite recent underperformance compared to its large-cap software peers, Adobe’s shares are trading at a relatively low multiple, which presents a compelling risk/reward opportunity. Weiss highlights the importance of changing the direction of EPS growth to counteract investor concerns about Adobe’s competitive positioning and the impact of GenAI innovations.
Key factors contributing to the Buy rating include the potential for accelerating topline growth, driven by strategic pricing changes in Adobe’s Digital Media segment. These changes are expected to provide a significant boost to ARR growth in the second half of the fiscal year and beyond. Additionally, ongoing share repurchases and potential margin expansion are seen as supportive of EPS growth. Overall, the combination of low expectations and potential upside in ARR growth creates an attractive investment case for Adobe.

According to TipRanks, Weiss is a 5-star analyst with an average return of 14.5% and a 66.46% success rate. Weiss covers the Technology sector, focusing on stocks such as Adobe, Intuit, and Microsoft.

In another report released yesterday, Jefferies also maintained a Buy rating on the stock with a $590.00 price target.