Goldman, BMO, and Jefferies Downgrade Adobe (ADBE)

Adobe Inc. (NASDAQ:ADBE) is one of the 11 Most Profitable Cheap Stocks to Invest In Now. On January 12, Goldman Sachs downgraded its rating on Adobe Inc. (NASDAQ:ADBE) from Buy to Sell and set a price target of $290. This downgrade came as analyst Gabriela Borges assumed coverage of the software company.

Goldman Sachs pointed out that the company’s near-term revenue growth is expected to be about 10%, which is below the 11% average seen among its peers. The firm also pointed to lower EPS growth of 10% compared with 18% for peers. Goldman Sachs highlighted concerns that Adobe Inc.’s (NASDAQ:ADBE) earnings could face more pressure if the company spends more on AI initiatives or if revenue growth falls to less than 10%.

Goldman, BMO, and Jefferies Downgrade Adobe (ADBE)

Earlier, on January 9, BMO Capital downgraded its rating on Adobe Inc. (NASDAQ:ADBE) from Outperform to Market Perform and cut its price target from $400 to $375. The research firm sees rising competitive dynamics in the creative market. While BMO Capital sees Adobe Inc.’s (NASDAQ:ADBE) current valuation as “undemanding,” it does not see any positive catalysts and believes the stock will remain range-bound.

On January 5, Jefferies also downgraded its rating on Adobe Inc. (NASDAQ:ADBE) from Buy to Hold and lowered its price target from $500 to $400. Jefferies pointed to rising competition in the lower-end segment of the market, where casual users now have access to many AI-powered alternatives to Adobe Inc.’s (NASDAQ:ADBE) Creative Cloud suite.

Adobe Inc. (NASDAQ:ADBE) is a global leader in digital media and digital marketing solutions. It provides creator tools and services to individuals, teams, and enterprises to create, publish, and promote content.

While we acknowledge the potential of ADBE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ADBE and that has a 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.