TLDR
- Citi cut its price target on Adobe to $315 from $387, maintaining a Neutral rating ahead of Q1 FY26 results on March 12
- ADBE stock is down roughly 20% year-to-date in 2026
- Analyst Tyler Radke flagged heavy discounting in January/February, with Creative Cloud Pro cut 40% for individuals and teams
- Wall Street expects Q1 EPS of $5.86 (up from $5.08 a year ago) and revenue of ~$6.28 billion, ~10% YoY growth
- Consensus rating is Moderate Buy from 27 analysts, with an average price target of $415.44 — implying ~47.5% upside from current levels
Adobe’s fiscal first quarter earnings are due March 12, and the stock is already under pressure. ADBE has dropped around 20% this year, and Citi just made the backdrop a little darker by slashing its price target.
Analyst Tyler Radke cut his target from $387 to $315, keeping his Neutral rating intact. He isn’t calling it a disaster — he just doesn’t see a near-term catalyst strong enough to get excited about.
Radke said login traffic in Q1 was “stable,” with mid-to-high teen growth. But he flagged a possible catch — some of that traffic may be coming from lower price point products like Express, Firefly, or Adobe’s freemium apps, rather than full-fat Creative Cloud subscribers.
That concern is worth watching. Growth is growth, until it isn’t — especially when it’s driven by free or heavily discounted users.
Discounts Raise Questions
In late January and February, Adobe ran notable promotions. Creative Cloud Pro was marked down 40% for both individuals ($41.99/month) and teams ($59.99/month) for first-time users. First-time students and teachers saw an even steeper 80% discount, at $12.49 per month.
Heavy discounting can pull in users, but it can also weigh on revenue quality. Radke said investors will be watching gross margin pressure closely, particularly from third-party model costs and ongoing investment spending.
The key metrics to watch on March 12 will be total Adobe ARR, BP&C revenue, and C&M revenue. Any early signals of growth acceleration — or the lack of them — will likely drive the stock’s reaction.
What the Street Expects
Wall Street is looking for Q1 EPS of around $5.86, up from $5.08 a year ago. Revenue is forecast at roughly $6.28 billion, representing about 10% year-over-year growth.
For the full year FY26, Adobe’s own guidance points to around $26.1 billion in revenue and adjusted EPS of approximately $23.50 — implying roughly 10% revenue growth and 12% earnings growth.
Radke said he expects Q1 results to slightly beat guidance, but he sees minimal room for upside revisions to the full-year outlook.
On ownership, Vanguard is the largest institutional holder of ADBE at 8.57%, followed by Vanguard Index Funds at 7.07%. The stock also has heavy ETF exposure — VTI owns about 3.20%, VOO holds 2.58%, and QQQ sits at 2.21%.
Among 27 Wall Street analysts, ADBE carries a consensus Moderate Buy rating, based on 13 Buys, 12 Holds, and 2 Sells over the last three months. The average price target of $415.44 implies roughly 47.5% upside from current levels.
The Q1 report drops March 12. Firefly adoption and monetization trends will be closely watched.
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