JPMorgan Cuts $ADBE Price Target to $315, Calls Shares Cheap Ahead of Monetization Recovery

JPMorgan lowered its price target on $ADBE to $315 from $340 while maintaining an Overweight rating, according to The Fly, calling the company's fiscal Q3 results "robust and beat expectations modestly." Adobe stock is down 63% from its late-2021 all-time highs and carries a $116 billion market cap.
Adobe posted Q3 revenue of $6.76 billion, up 12% year over year, and adjusted EPS of $6.13, up 15%. Total ending annual recurring revenue reached $27.5 billion, up 11.2%, with Firefly ARR up 40% quarter over quarter and creative freemium monthly active users topping 100 million, up more than 70% year over year. CEO Shantanu Narayen said Adobe's tools now reach over one billion monthly active users, up more than 20% from a year earlier.
Despite the beat, JPMorgan flagged softer-than-expected Q4 guidance, tied to Adobe's continued focus on user acquisition over pricing. Current period remaining performance obligations grew just 9% year over year, the slowest pace since early fiscal 2023, and JPMorgan also pointed to expected slower revenue growth in fiscal 2027. Even so, the firm said the shares are now inexpensive and offer a "low bar for upsides to the share price from a recovery in monetization."
Adobe also disclosed that Narayen, who has led the company for 29 years, will move to executive chair on December 1, with Anil Chakravarthy, currently president of customer experience orchestration, becoming the next CEO.