There are longer term concerns around the durability of Adobe’s Creative Cloud, according to BMO Capital Markets. Analyst Keith Bachman downgraded shares of Adobe to market perform from outperform, and reduced 2022 and 2023 estimates. “We are moving to the sidelines on Adobe, and our timing is driven by receiving the second set of survey data focused on Adobe’s Creative Cloud, not the upcoming quarter. We have a more balanced viewed on Adobe based on the results our survey and channel feedback,” Bachman wrote in a Tuesday note. A survey from the firm showed that respondents are willing to move away from Adobe Creative Cloud, especially younger workers, as well as employees at companies with less than 5,000 workers, according to the note. Meanwhile, employees 45 years and older, as well as workers at big companies, were “more loyal” to the Adobe brand, though the trend declined in the April to August period, according to the note. “The findings from our surveys raise longer-term concerns,” Bachman wrote. “While there are some areas in which we remain bullish, including Adobe’s potential with its CDP offering, we choose to move to the sidelines given our uncertainty about the durability of growth for Creative Cloud, which generates about 60% of total revenues,” read the note. The firm raised the price target slightly to $435, up from $420, representing roughly 10% upside from Monday’s close of $396.36. Adobe is down 30% in 2022, and off roughly 43% off its 52-week high. Shares dipped 0.3% in Tuesday premarket trading. —CNBC’s Michael Bloom contributed to this report.
