.September 9, 2024 at 4:03 PM

Evercore ISI analysts reiterated an Outperform rating on Adobe (NASDAQ:ADBE) with a price target of $650 ahead of the company’s Q3/2024 earnings report. Despite a less pronounced valuation discount, Adobe’s attractive fundamental setup is highlighted.

Initially, Adobe’s Digital Media Net New Annualized Recurring Revenue (NNARR) guidance of $1.9 billion caused a drop in the stock, but strong momentum from Firefly has exceeded guidance for the first two quarters of the year.

Analysts expect further upside for Adobe following a 23% rise in the stock in the last three months, with third-quarter results and the upcoming MAX event in October. Historical trends suggest a potential NNARR of $2 billion for the year, with pricing headwinds turning into tailwinds and products like Acrobat AI Assistant and Firefly driving growth.