Adobe Downgraded to Sell, Targets Cut to $270 as Shares Fall 42%
Analysts at Melius Research and Goldman Sachs have downgraded Adobe to Sell, cutting 12-month price targets from $310 and $290 to $270, as shares tumbled 42% over the past year. Growth projections of 10% revenue and EPS place Adobe in the bottom valuation quartile versus peers.
1. Analyst Rating Downgrades
On February 9, Melius Research reiterated a Sell rating on Adobe and reduced its 12-month target from $310 to $270. Earlier on January 12, Goldman Sachs cut Adobe from Buy to Sell and set its target at $290.
2. AI Threats and Competition
Melius highlighted that advancing AI technologies pose takeover risks for SaaS providers, pointing to increased competitive pressures following Figma’s IPO. Analysts warn that further AI-driven contraction could erode Adobe’s core software franchises.
3. Growth Metrics vs Peers
Goldman Sachs flagged Adobe’s projected 10% revenue and 10% EPS growth over the next twelve months, trailing peer medians of 11% revenue and 18% EPS growth. This relative underperformance positions Adobe in the bottom PEG valuation quartile.
4. Wall Street Consensus
Despite recent downgrades, the 12-month median price target across analysts implies over 50% upside, with 55% of covering firms still maintaining a Buy rating. The divergent views underscore mixed sentiment on Adobe’s AI resilience and growth trajectory.