On Friday, HSBC adjusted its outlook on Adobe (NASDAQ:ADBE) shares, reducing the price target to $511 from the previous $557, while sustaining a Hold rating on the stock. The firm's valuation method for Adobe is based on a price-to-earnings (PE) multiple.0
The unchanged target PE multiple of 27.0 times is applied to the revised next 12-month non-GAAP earnings per share (EPS) estimate of $18.93, down from the prior forecast of $20.64 for FY25e non-GAAP EPS.
The new price target of $511 suggests a potential 10.9% downside from the current level. Despite the lower earnings estimate, HSBC has decided to maintain the Hold rating on Adobe. The firm's stance reflects a cautious perspective on the company's near-term valuation, which may stay on the higher side due to prevailing market sentiments around artificial intelligence (AI).
Adobe, listed on the NASDAQ under the ticker ADBE, has been under the scrutiny of analysts who are closely watching the company's financial performance and its strategic positioning in the market, especially with the growing interest and developments in AI technology. The adjustment in the price target by HSBC indicates a reassessment of the company's future earnings potential.
The reduction in Adobe's price target by HSBC comes amidst a dynamic environment for tech stocks, where technological advancements and market trends often influence investor sentiment. The company's stock performance will continue to be monitored by investors as they consider HSBC's updated valuation and the potential impact of AI on Adobe's offerings and market position.
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