Adobe Inc. (NASDAQ:ADBE) is facing mounting pressure as tightening marketing budgets and shifting enterprise priorities cloud its growth outlook, with new survey data pointing to reduced spending on digital marketing and front-office software even as competition from AI-driven platforms intensifies heading into 2026.
Keybanc analyst Jackson Ader downgraded Adobe from Sector Weight to Underweight and announced a $310 price forecast.
Analyst View
The analyst writes that heading into 2026, Adobe faces similar challenges highlighted earlier.
It includes competition from traditional rivals, emerging AI players, large language model developers, and a prevailing market narrative that will be difficult to overcome, adds the analyst.
The analyst says that their second-half fiscal 2025 CIO survey signals headwinds for Adobe, with front-office segments, including digital marketing, losing priority over the next 12 months.
Notably, sales and marketing budgets show a 16-point net decrease, and 13% of respondents expect reduced focus on front-office applications, highlighting pressure on Adobe amid tightening marketing spend, adds the analyst.
Overall, Ader says that they appreciate Adobe’s share buyback program and recognize its financial profile as one of the strongest in the industry.
However, the analyst sees limited opportunities for the company to outperform in 2026, suggesting it will likely lag behind its broader coverage.
Despite the downgrade, the analyst says that FY1 Revenue projection remains at $25.997 billion with an expected growth rate of 9.4%, and the FY2 Revenue is forecast to be $28.377 billion, growing at 9.2%.
Recent Earnings
This month, Adobe reported quarterly earnings of $5.50 per share, which beat the analyst estimate of $5.39. Quarterly revenue came in at $6.19 billion, which beat the Street estimate of $6.11 billion.
Adobe sees fiscal 2026 GAAP EPS of $17.90 to $18.10, versus the $16.56 analyst estimate.
ADBE Price Action: Adobe shares were down 1.78% at $350.07 at the time of publication on Monday, according to Benzinga Pro data.
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