Adobe Outlook Not Yet Inspiring Amid Solid Q4, Morgan Stanley Says

MT Newswires Live12-12

Adobe (ADBE) reported solid fiscal Q4 results but its fiscal 2026 guidance continues to reflect a decelerating growth trend, Morgan Stanley said in a report Thursday.

The report said the results were solid, with revenue, margins and Digital Media net new annualized recurring revenue beating consensus. It also pointed to compounding GenAI adoption.

But its annualized recurring revenue guidance implied about 10.2% growth for fiscal 2026, below the 11.5% Q4 exit rate, the note said, adding that its revenue outlook was largely in-line.

"Despite significant portfolio expansion for AI capabilities and early shift to monetization, investors likely need firmer evidence of a growth re-acceleration and/or material positive revisions to

the forward outlook to ease concerns on AI competition," it said.

Morgan Stanley said valuation remains undemanding but it kept the stock at equal weight awaiting "greater" conviction in growth outlook. It cut its price target to $425 from $450.

Price: 346.16, Change: +3.03, Percent Change: +0.88

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment