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Investing.com - RBC Capital has reiterated its Outperform rating and $480.00 price target on Adobe (NASDAQ:ADBE), maintaining its positive outlook despite increasing competition in the creative tools market. According to InvestingPro data, Adobe maintains impressive gross profit margins of 89.25% and currently appears undervalued based on its Fair Value analysis.
The firm acknowledges the growing fragmentation in the creative market over the past two years, particularly regarding generative content creation tools, which has been a key area of investor concern.
RBC Capital worked with its in-house data science team, RBC Elements, to analyze current trends in the creative market, noting that Adobe management has highlighted additional metrics around Express and GenStudio to quantify performance.
The analyst views Adobe’s decision to embed competitive models within Firefly as aligning with their perspective that long-term wallet share opportunity centers more on generative editing than creation itself.
RBC Capital identifies tiered pricing and potential consumption revenue from compute-intensive models for video, 3D, and vector as key sentiment drivers for investors seeking visibility into Adobe’s generative AI monetization strategy.
In other recent news, Adobe has faced a variety of analyst opinions and competitive challenges. Melius Research downgraded Adobe from Hold to Sell, citing concerns over AI’s impact on the software-as-a-service model and setting a price target of $310. Redburn-Atlantic also downgraded Adobe to Sell, lowering its price target significantly to $280 due to concerns about generative AI tools eroding Adobe’s competitive advantage. On a more positive note, DA Davidson reiterated its Buy rating with a $500 price target, highlighting Figma’s strong financial growth and Adobe’s strategic positioning in digital content generation. Additionally, Citizens JMP maintained its Market Perform rating on Adobe, following news of competitor Canva’s acquisition of MagicBrief, an AI-powered ad platform. These developments reflect a mixed sentiment among analysts about Adobe’s future in the evolving tech landscape.
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