Adobe (ADBE, Financial) is set to release its fiscal Q2 results on Thursday after markets close, and analysts say the spotlight will be squarely on the company's generative AI roadmap and competitive strategy.
Morgan Stanley believes investor worries over Adobe's positioning in the AI space have contributed to the stock underperforming large-cap software peers by roughly 15 percentage points over the past three months.
In a note Tuesday, analyst Keith Weiss said low expectations — paired with potential gains in annual recurring revenue for Adobe's Digital Media business — create a favorable risk-reward setup. The firm rates the stock Overweight with a $510 price target.
Weiss also pointed to Adobe's push for innovation at the high end of its product line and more flexible pricing for smaller customers as key to boosting growth.
Jefferies echoed that optimism, highlighting Adobe's 7% price hike for Creative Cloud renewals starting June 17. Analyst Brent Thill said the move should help offset headwinds from prior pricing changes and potentially lift 2026 results. Jefferies maintains a Buy rating and a $590 price target.
Consensus estimates call for adjusted earnings of $4.97 per share on revenue of $5.8 billion. That compares with $5.08 in adjusted EPS and $5.71 billion in revenue from the previous quarter.
Jefferies also flagged currency movements as a potential boost to revenue, estimating a 1 percentage point tailwind compared with current expectations of a neutral to slight headwind.
