After two straight quarters of Creative Cloud net new annual recurring revenue declines, as well as “a growthier outlook from private competitors and a steady drumbeat of new GenAI diffusion engine innovations,” Adobe sentiment and multiple have been pressured, Morgan Stanley analyst Keith Weiss tells investors in a preview note. The firm sees “a difficult set-up for the Q2 print” with pricing headwinds in Digital Media and enterprise software malaise in Digital Experience, but contends that the report “may prove a clearing event” given the weak investor sentiment, ramping product cycles and easing comps in the second half. The firm maintains an Overweight rating and $660 price target on Adobe ahead of the Q2 report.
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