Adobe stock fell for a fourth straight session on Thursday, pushing ADBE to a more than one-month low ahead of the company’s fiscal third-quarter earnings report after market close. Wall Street was looking for $6.09 in EPS and $6.7 billion in revenue, a setup that put the focus on whether Adobe can justify that bar.
Stifel and Mizuho Lift Targets
J. Parker Lane of Stifel raised the firm’s price target to $225 from $200 and kept a Hold rating. He said Adobe shares had rebounded 33% from their year-to-date lows heading into fiscal Q3, pointing to the company’s acceleration of its freemium strategy and changes in the competitive landscape driven by AI.
Mizuho also moved higher on the name, lifting its target to $260 from $245 and maintaining a Neutral rating. The firm said investor sentiment remained negative but had improved after Adobe’s 38% rebound from its late-June trough, with channel checks solid during the quarter and web traffic showing meaningful improvement for a second consecutive quarter.
Adobe and AI Pressure
The stock still slid even with those higher targets in place, a split that left traders focused on whether the rebound can hold once Adobe prints fiscal Q3 results. Mizuho said it expected guidance to be beatable, although visibility remained limited, and it cited uncertainty around Adobe’s recent freemium pivot and deferred Creative Cloud line optimizations.
25 billion dollars of share buyback authorization adds another layer to the setup, but the near-term question is narrower: whether Adobe’s earnings and guidance can satisfy a market that has already priced in a partial recovery. A report that OpenAI had banned ads from Adobe and other competing AI image and audio products on ChatGPT added to the pressure around AI-driven competition before Thursday’s release.
After market close on Thursday, Adobe’s fiscal third-quarter earnings report was set to provide the first hard read on EPS, revenue, and guidance against that backdrop. If the numbers and outlook hold up, the shares have room to stabilize; if they do not, the recent rebound looks fragile.
