Adobe (NASDAQ:ADBE) stock is on the move Thursday following a new price target from Bank of America analyst Brad Sills for the software company.
This has the Bank of America analyst increasing his price target for ADBE stock from $575 per share to $630 per share. That represents a potential upside of 22% over the next year. It’s also well above the analyst consensus price prediction of $520.26 per share.
To go along with that increased price target, Sills also upgraded ADBE stock from a “neutral” rating to a “buy” rating. For the record, the analyst consensus rating for Adobe is a “moderate buy” based on 28 opinions.
Why the Bull Stance on ADBE Stock?
The Bank of America analyst said the following about Adobe in a note to clients obtained by CNBC:
“Adobe is ahead of the curve, and we believe that AI offerings (such as generative AI-powered content creation tool Firefly) are likely to begin driving meaningful revenue/[free cash flow] upside as soon as FY24.”
Sills breaks that statement down by setting new expectations for ADBE in the years to come. His conservative estimates include artificial intelligence (AI) revenue of $300 million in fiscal 2024. He also claims that Adobe could generate $960 million in AI revenue by 2026. Sills’ best-case scenario has Adobe generating AI revenue of $1 billion in 2024 and $2.9 billion by 2026.
ADBE stock is up 2% as of Thursday morning and up 52.7% year-to-date (YTD) as of Thursday’s close.
Investors looking for even more of the most recent stock market news will want to stick around!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
