Adobe Systems’ (ADBE) Q3 earnings conference call highlighted generative artificial intelligence opportunities for the company, while the quarter’s financial results further proved the “strong momentum” of its core business, Morgan Stanley said Friday in a note.
Net new annual recurring revenue from the digital media division topped Street consensus by 12% at $464 million, while Q4 guidance may be “shy of buyside expectations” following recent price increases, Morgan Stanley said. New generative AI product releases are expected to drive a “broader proliferation” of Adobe’s technology, the note said.
Adobe reported fiscal Q3 non-GAAP earnings of $4.09 per share, up from $3.40 a year earlier, as revenue increased to $4.89 billion from $4.43 billion. Morgan Stanley said it remains “more confident” in its above-consensus forecast for the company’s fiscal Q4 results.
Morgan Stanley reiterated its overweight rating on Adobe with a price target of $660.