Analysts Had Mixed Views On Adobe Post Annual Event

Analysts attended Adobe Inc's ADBE annual creativity conference, MAX, and its financial analyst meeting yesterday.

Mizuho analyst Gregg Moskowitz reiterated a Neutral on Adobe and a $360 price target.

ADBE unveiled a series of new initiatives and platform enhancements, and management expressed much bullishness on the pending Figma acquisition. 

ADBE also initiated FY23 revenue, net new Digital Media ARR, and EPS guidance that was well below his estimates and even more meaningfully below consensus. However, he believes many investors will view the guide as de-risked. 

ADBE does remain well-positioned to benefit from digital transformation with its comprehensive end-to-end offering. However, Moskowitz believes the shares will likely be range-bound over the near- to medium-term. 

Credit Suisse analyst Phil Winslow cut the price target to $325 from $350 and maintained a Neutral. 

The management reaffirmed its current fourth quarter 2022 financial targets and provided initial financial targets for 2023, which do not reflect their planned acquisition of Figma. 

Additionally, management noted that continued USD strength will likely result in a 4% headwind to total revenue growth in 2023 and a $700 million downward revaluation to their total Digital Media ARR balance.

BMO Capital analyst Keith Bachman reiterated a Market Perform and price target of $332. He returned a bit more encouraged, though not enough to change his views at this juncture. 

Bachman's encouragement is driven by a better-than-expected Digital Experience Guide, not as bad as the expected margin and EPS guide, and greater confidence in Figma. 

While Digital Media's net new ARR guide was below his $1.7 billion target, Bachman's initial take is that management is being appropriately judicious in the outlook. He did not change his estimates, target price, or rating. 

RBC Capital analyst Matthew Hedberg maintained Adobe with an Outperform and lowered the price target from $425 to $395 on lowered estimates.

While investor focus coming out of day one of Adobe Max will be around initial FY23 guidance, the majority of the event revolved around the health of the creative cloud showcasing the accessibility and usability of the creative suite, including Express, but also AI and ML enhancements leading to an expanded TAM. 

Price Action: ADBE shares traded higher by 2.48% at $300.26 on the last check Wednesday.

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