Keith Weiss, an analyst from Morgan Stanley, maintained the Hold rating on Adobe. The associated price target was raised to $450.00.
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Keith Weiss has given his Hold rating due to a combination of factors surrounding Adobe’s current market positioning and strategic initiatives. While Adobe is making strides in creating an open and integrated platform, which could potentially strengthen its position in the creative industry, there are concerns about the company’s ability to effectively monetize its AI capabilities amidst growing competition. The company’s strategy to include third-party models alongside its own offerings is seen as a positive step towards mitigating competitive risks and enhancing user experience.
However, the recent changes in financial reporting, particularly the shift from Digital Media ARR to total Adobe ARR, have introduced some uncertainty. This change, while aligning with internal metrics, reduces transparency at a time when investors are seeking more clarity, which could weigh on investor sentiment. Despite the attractive risk/reward profile at the current valuation, the limited visibility into AI monetization and growth acceleration, combined with the reporting transition, suggests a delay in the catalyst for renewed investor enthusiasm, justifying the Hold rating.
Weiss covers the Technology sector, focusing on stocks such as Microsoft, Adobe, and Intuit. According to TipRanks, Weiss has an average return of 12.8% and a 63.89% success rate on recommended stocks.
In another report released yesterday, TD Cowen also maintained a Hold rating on the stock with a $420.00 price target.