TLDR
- RBC Capital raised its ADBE price target to $315, expecting an ARR beat in Q3 FY26 earnings on September 10
- Barclays also raised its price target, to $295 from $250, while keeping an Equalweight rating
- Wall Street expects Q3 earnings of $6.08 per share on $6.69 billion in revenue, up ~11.7% year over year
- Morgan Stanley bucked the trend, downgrading Adobe to Underweight with a $240 target over AI substitution concerns
- The average Wall Street price target of $260.98 implies about 7% downside from current levels
Adobe is heading into its fiscal Q3 2026 earnings report on September 10, and analysts are adjusting their targets ahead of the print. ADBE stock currently trades around $279, down about 2.2% on the day.
RBC Capital analyst Matthew Swanson raised his price target to $315 from $285, keeping a Buy rating. He projects earnings of $6.08 per share on revenue of $6.7 billion, roughly in line with consensus. The bigger call is on annual recurring revenue. Swanson expects Adobe to beat the $27.47 billion ARR estimate tracked by FactSet.
ARR is the number investors will be watching most closely. It reflects the health of Adobe’s subscription business and is seen as a leading indicator of future revenue.
Swanson also pointed to improving sentiment toward software stocks as a recent tailwind for ADBE. He said a return to ARR growth will be key to pushing the valuation higher. The raised target also reflects broader multiple expansion across the software sector.
Barclays separately lifted its price target to $295 from $250 but kept an Equalweight rating. The firm models $400 million in net new ARR for Q3, a sequential decline it attributes to a higher freemium mix. Barclays sees a potential upside case of $420 million or more if web traffic and app downloads remain strong.
Q4 and Fiscal 2027 Outlook
For Q4 FY26, Barclays projects net new ARR of $770 million, reflecting seasonal enterprise strength. The firm’s FY27 net new ARR estimate sits below the Street’s $2.34 billion consensus, though Barclays notes that adjusting for the Semrush contribution and a 53rd week would imply over 20% underlying growth year over year.
The new $295 Barclays target is based on roughly 11 times FY27 earnings per share. The firm flagged that incoming leadership could set FY27 guidance conservatively.
Adobe has not yet named a new CEO after Shantanu Narayen announced in March 2026 that he would step down after 18 years. A new CFO appointment is also possible. Swanson noted that any leadership announcements could move the stock on earnings day.
Not everyone is bullish. Morgan Stanley downgraded Adobe to Underweight and cut its target to $240, citing risks from AI substitution eating into Creative Cloud’s recurring revenue base.
Where Analysts Stand
Citi raised its target to $301, pointing to higher software multiples, though it flagged a projected 26% decline in net new ARR in the second half of the year. CLSA initiated coverage with an Outperform rating and a $300 target.
On TipRanks, ADBE carries a Hold consensus based on nine Buys, 16 Holds, and four Sells over the past three months. The average price target of $260.98 implies about 7% downside from current levels.
Adobe’s Q3 FY26 results are due September 10.
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