Adobe (NASDAQ:ADBE) Raised to Moderate Buy at CLSA

Key Points

• CLSA upgraded Adobe to a “moderate buy,” but the broader analyst view remains cautious, with MarketBeat showing a consensus rating of Hold and an average target price of $271.30.
• Adobe reported better-than-expected quarterly results, posting EPS of $5.96 versus $5.82 expected and revenue of $6.62 billion versus $6.45 billion expected. Revenue rose 12.7% year over year, and the company also issued FY2026 and Q3 2026 guidance.
• The company continues to highlight shareholder returns and insider activity, including a $25 billion stock repurchase program and a recent director purchase of 10,000 shares. Institutional ownership remains high at 81.79%.

Adobe (NASDAQ:ADBE - Get Free Report) was upgraded by CLSA to a "moderate buy" rating in a report released on Monday,Zacks.com reports.

A number of other research analysts also recently commented on the company. Sanford C. Bernstein reduced their price target on Adobe from $447.00 to $379.00 and set an "outperform" rating for the company in a report on Friday, June 12th. JPMorgan Chase & Co. cut their target price on Adobe from $420.00 to $340.00 and set an "overweight" rating on the stock in a research report on Friday, June 12th. Bank of America restated an "underperform" rating and issued a $190.00 price target on shares of Adobe in a research note on Tuesday, July 7th. Royal Bank Of Canada reduced their price objective on shares of Adobe from $350.00 to $285.00 and set an "outperform" rating on the stock in a research note on Monday, June 8th. Finally, Morgan Stanley downgraded shares of Adobe from an "overweight" rating to an "underweight" rating and set a $240.00 price objective on the stock. in a research note on Tuesday. Seven research analysts have rated the stock with a Buy rating, twenty-one have assigned a Hold rating and six have issued a Sell rating to the company. Based on data from MarketBeat.com, Adobe presently has a consensus rating of "Hold" and an average target price of $271.30.

Adobe Stock Performance

Shares of NASDAQ:ADBE opened at $234.74 on Monday. The company has a debt-to-equity ratio of 0.42, a quick ratio of 0.75 and a current ratio of 0.75. Adobe has a one year low of $190.12 and a one year high of $376.16. The business's 50-day simple moving average is $228.35 and its 200 day simple moving average is $254.68. The company has a market cap of $93.31 billion, a P/E ratio of 13.43, a PEG ratio of 0.80 and a beta of 1.43.

Adobe (NASDAQ:ADBE - Get Free Report) last announced its earnings results on Thursday, June 11th. The software company reported $5.96 earnings per share for the quarter, beating the consensus estimate of $5.82 by $0.14. Adobe had a net margin of 28.69% and a return on equity of 65.11%. The business had revenue of $6.62 billion during the quarter, compared to the consensus estimate of $6.45 billion. During the same period in the prior year, the firm earned $5.06 earnings per share. The business's quarterly revenue was up 12.7% compared to the same quarter last year. Adobe has set its FY 2026 guidance at 24.350-24.450 EPS and its Q3 2026 guidance at 6.050-6.100 EPS. On average, sell-side analysts forecast that Adobe will post 19.81 earnings per share for the current fiscal year.

Adobe declared that its Board of Directors has approved a stock repurchase program on Tuesday, April 21st that permits the company to repurchase $25.00 billion in shares. This repurchase authorization permits the software company to buy up to 24.9% of its stock through open market purchases. Stock repurchase programs are often an indication that the company's management believes its shares are undervalued.

Insider Activity

In other news, Director David A. Ricks purchased 10,000 shares of the stock in a transaction dated Thursday, June 25th. The stock was acquired at an average cost of $194.51 per share, for a total transaction of $1,945,100.00. Following the acquisition, the director owned 17,655 shares of the company's stock, valued at $3,434,074.05. The trade was a 130.63% increase in their ownership of the stock. The acquisition was disclosed in a filing with the SEC, which is accessible through this link. Also, CAO Jillian Forusz sold 755 shares of the company's stock in a transaction that occurred on Thursday, April 30th. The shares were sold at an average price of $246.25, for a total value of $185,918.75. Following the sale, the chief accounting officer directly owned 3,521 shares in the company, valued at approximately $867,046.25. This represents a 17.66% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Company insiders own 0.20% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of ADBE. Willis Investment Counsel lifted its holdings in shares of Adobe by 138.9% during the 4th quarter. Willis Investment Counsel now owns 40,715 shares of the software company's stock worth $14,250,000 after acquiring an additional 23,671 shares during the period. Nicholas Company Inc. lifted its stake in Adobe by 7.6% during the fourth quarter. Nicholas Company Inc. now owns 174,626 shares of the software company's stock worth $61,117,000 after purchasing an additional 12,400 shares during the period. Teacher Retirement System of Texas lifted its stake in Adobe by 13.4% during the fourth quarter. Teacher Retirement System of Texas now owns 215,611 shares of the software company's stock worth $75,462,000 after purchasing an additional 25,435 shares during the period. Wealthfront Advisers LLC grew its stake in shares of Adobe by 13.2% in the 4th quarter. Wealthfront Advisers LLC now owns 55,179 shares of the software company's stock valued at $19,312,000 after purchasing an additional 6,426 shares during the period. Finally, True North Advisors LLC raised its holdings in shares of Adobe by 301.1% in the 4th quarter. True North Advisors LLC now owns 6,493 shares of the software company's stock worth $2,273,000 after buying an additional 4,874 shares in the last quarter. 81.79% of the stock is owned by institutional investors and hedge funds.

Adobe News Roundup

Here are the key news stories impacting Adobe this week:

• Positive Sentiment: Adobe is adding new AI-powered features to its experimental Project Indigo camera app, including LLM-based photo critiques and editing suggestions, reinforcing the company’s AI product momentum and showing continued innovation in consumer-facing tools. Adobe camera app's new feature will critique your photos using AI
• Positive Sentiment: Adobe was highlighted as a strong value stock in a Zacks screen, which may support investor confidence by reinforcing the stock’s valuation appeal after its pullback. Here's Why Adobe Systems (ADBE) is a Strong Value Stock
• Neutral Sentiment: Recent coverage placing Adobe among top digital media stocks to watch does not point to a new catalyst, but it keeps the name on investors’ radar. Top Digital Media Stocks To Watch Today - July 17th
• Neutral Sentiment: Adobe’s stock was noted as dipping more than the broader market in the latest session, suggesting the decline was modest and may have been driven by general trading weakness rather than company-specific bad news. Why Adobe Systems (ADBE) Dipped More Than Broader Market Today
• Negative Sentiment: Adobe CEO Shantanu Narayen sold 4,112 shares for about $923,000, a move some investors may view as a mild negative signal even though it represented only a small reduction in his overall stake. Here's What the Adobe CEO's Sale of Company Shares for Over $900,000 Means for Investors.

About Adobe

Adobe Inc, founded in 1982 by John Warnock and Charles Geschke and headquartered in San Jose, California, is a global software company that develops tools and services for creative professionals, marketers and enterprises. Under the leadership of CEO Shantanu Narayen, who has led the company since 2007, Adobe has evolved from a provider of desktop publishing tools into a cloud-centric provider of digital media and digital experience solutions.

The company's core offerings are organized around digital media and digital experience.

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