Adobe's AI Roadmap In Focus: These Analysts Provide Their Takeaways From The Adobe Summit

Adobe Inc. ADBE on Monday kicked off the Adobe Summit, which is scheduled through March 28 and had already seen the unveiling of GenStudio.

Here are some key analyst takeaways from the event at Las Vegas.

BMO Capital Markets On Adobe

Analyst Keith Bachman reiterated an Outperform rating and price target of $610.

Adobe’s new product innovation focuses on “incremental enterprise use cases in both Creative Cloud and Experience Cloud, which supports our view of Adobe as a leader in enterprise workflow,” Bachman said in a note.

“Firefly Custom Models allow companies to use their IP and brands to create AI content, which we think enterprises will leverage to create more personalized content and marketing campaigns,” the analyst wrote.

“We believe the Firefly Services to use API programming for personalization at scale will integrate with Firefly Custom Models,” Bachman added.

JPMorgan On Adobe

Analyst Mark Murphy maintained a Neutral rating and price target of $570.

Although the event might not trigger changes in the consensus estimates, “we walk away incrementally positive on Adobe’s strategy and approach to GenAI, its deepening technology integration across product pillars, and expanding market, which is expected to see incremental growth as a result of GenAI,” Murphy wrote.

The company made “a compelling case” for it being poised to benefit from the emerging trends in GenAI, the analyst stated. “Adobe reiterated that the early stages of gradual revenue tailwinds from its GenAI products would be weighted toward 2H FY24 and that the roll-out of a text-to-video generation solution would likely be later in the year as well,” Murphy added.

Check out other analyst stock ratings.

Oppenheimer On Adobe

Analyst Brian Schwartz reaffirmed an Outperform rating and price target of $660.

Although Adobe reiterated its 2024 guidance, GenAI is expected to become “the next $1B+ business” for the company, Schwartz said.

The event showcased that solutions are “quickly moving beyond image and text effects to include custom models, video, audio, 3D, photography and assistants,” the analyst stated. “Creative Cloud and Digital Experience technologies are increasingly coming together,” Schwartz added.

Piper Sandler On Adobe

Analyst Brent Bracelin reiterated an Overweight rating and price target of $700.

“Adobe continues to solidify its position as a leading AI innovator,” Bracelin wrote in a note. The analyst added, however, that AI adoption is “very nascent, with most companies still in experimentation and evaluation mode.”

“We look forward to additional proof points as adoption, monetization, and value creation become more tangible and as ADBE further penetrates its growing ~$200B TAM,” Bracelin further stated.

BofA Securities On Adobe

Analyst Brad Sills maintained a Buy rating and price target of $640.

The company reiterated its 2024 guidance for NNARR (net new annual recurring revenue) from Digital Media of $1.9 billion, Sills said.

The event showed partner enthusiasm had increased significantly since last year and that AI could be a “tangible” revenue driver for Digital Experience in the near term, the analyst stated. “Large Fortune 500 companies are already “piloting generative AI into their marketing workflows” and Adobe is an AI beneficiary, “with a number of new technologies coming later this year.”

ADBE Price Action: Shares of Adobe had declined by 1.03% to $502.33 at the time of publication on Wednesday.

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