Adobe price target lowered to $640 from $700 at BofA

BofA lowered the firm’s price target on Adobe to $640 from $700 and keeps a Buy rating on the shares. Adobe reported “disappointing” Q1 results and introduced uncertainty by not updating FY24 guidance for digital media net new annual recurring revenue or EPS in “a break from the past,” the analyst tells investors. The level of the net new digital media ARR for Q1 beat coming down from the beats in each of the last three quarters, coupled with the lack of FY24 guidance, reintroduces concerns about Adobe’s pricing power to monetize AI offerings like Firefly, argues BofA, but the firm still sees multiple paths for monetization later this year and long term.