Keith Weiss, an analyst from Morgan Stanley, maintained the Buy rating on Adobe (ADBE – Research Report). The associated price target remains the same with $510.00.
Keith Weiss has given his Buy rating due to a combination of factors, primarily focusing on Adobe’s current valuation and growth potential. Despite the market’s skepticism, which is reflected in Adobe’s low valuation, Weiss believes that the company’s innovative capabilities and pricing power are not being fully appreciated by investors. This undervaluation presents a compelling opportunity for long-term growth.
Weiss points out that the market is currently pricing in a slowdown in Adobe’s long-term earnings growth, projecting it at around 8% annually, compared to the Street’s expectation of a 12% compound annual growth rate. However, he argues that Adobe’s accelerated pace of product innovation and potential for margin expansion could drive higher growth than anticipated. As a result, the current share price does not reflect the potential for mid-teens earnings per share growth, making Adobe an attractive investment at this time.
In another report released today, Barclays also maintained a Buy rating on the stock with a $567.00 price target.