Deutsche Bank analyst Brad Zelnick reiterated a Buy rating and $650.00 price target on Adobe (NASDAQ: ADBE).

The analyst comments "Adobe heads into F1Q earnings on Thursday, March 14th with sentiment decidedly more bearish on the name than in recent quarters. We expect the magnitude of F1Q DM NNARR upside to be particularly in focus given seemingly conservative FY24 guidance and we expect the level of outperformance seen in the quarter will likely set the tone for the rest of the year. We expect some level of DM NNARR outperformance, with expectations potentially closer to last 4 quarters exceeding guidance by ~10% vs ~5% seen in FY22. F1Q will be supported by a full quarter of Creative Cloud price increases and what our partner checks suggest is good momentum from Express across mid-market and enterprise segments. We note, however, that some potential tailwinds to NNARR such as Acrobat AI Assistant subscription add-on, new Firefly models, or generative credit packs are unlikely to contribute meaningfully until 2H. We expect DX results to be largely in-line as our partner checks reflect a stable demand environment with Adobe continuing to benefit from its platform approach, with F1Q strength in run-rate deals. Beyond results, we expect investors to focus on (1) momentum of Firefly/Express; (2) commentary on organic innovation, particularly video given the prominence of OpenAI's Sora release; and (3) capital allocation commentary post Figma merger termination. Adobe partners we spoke with were optimistic about Acrobat AI Assistant, noting the potential to become "indispensable" to Acrobat power users such as lawyers and procurement professionals. They also indicated the deprecation of third-party cookies could drive increased interest in Adobe DX analytics solutions in 2H as the deprecation impact becomes more pronounced. Over the medium-term, we expect Adobe will continue to benefit from its leverage to a more digital future, consistent innovation, pricing power, solid execution, and category leadership. We continue to believe genAI represents a significant opportunity for Adobe, though note there are puts and takes to account for (see our deep-dive into generative AI and Adobe)."

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Shares of Adobe closed at $543.09 yesterday.