Analysts have been turning increasingly optimistic on Adobe (ADBE:NASDAQ) this year, but you wouldn’t have guessed it by looking at the price. Shares in the Photoshop to Illustrator graphic designs software firm have drifted so far in 2024, partly due to soft revenue guidance issued in December 2023.

Some of the most bullish analysts had anticipated as much as $25 billion sales this year (to the end of November), so a steer between  $21.3 billion to $21.5 billion left the market deflated. Koyfin consensus data is currently pitched at $21.5 billion.

We'll likely get a feel for whether that mark is too gloomy when first quarter 2024 earnings are released. Consensus calls for $4.38 earnings on $5.12 billion revenue, implying 19% and 11% year-on-year growth respectively. That would be pretty good going given signs of wider software softness as corporates cut back on costs, yet it hasn’t stopped Adobe pushing through price rises this year, always an encouraging sign that clients simply can’t run without its design tools.

This hints that consensus might be over-egging the pessimism, which in turn suggests potential to upside surprise, which could spark share price revival. If so, analyst price targets of $700-plus may not look so left-field for this year, as Shares suggested in our picks for 2024. 

‹ Previous2024-03-07Next ›