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%.

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.

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