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Investing.com - Rothschild Redburn has reiterated its Sell rating and $280.00 price target on Adobe (NASDAQ:ADBE), representing the lowest among analyst targets ranging from $280 to $605, after evaluating Google’s new Nano Banana image editing model. According to InvestingPro data, Adobe currently trades at $356.70 with a market capitalization of $151.31 billion.
The investment firm expressed concerns that Google’s AI tool will disrupt Photoshop, one of Adobe’s most widely-used applications, potentially affecting the company’s seat growth and pricing power. Despite these concerns, Adobe maintains impressive gross profit margins of 89.25% and has demonstrated solid revenue growth of 10.63% over the last twelve months.
Rothschild Redburn noted that both Nano Banana and Runway’s Aleph demonstrate significant performance improvements in generative AI tools in recent months, with the rapid pace of advancement being a key concern for Adobe’s business.
The firm specifically highlighted that image and video generation models with fully editable outputs appear increasingly likely to emerge within months, which could challenge Adobe’s competitive advantages.
Based on these developments, Rothschild Redburn maintained its bearish stance on Adobe, suggesting that the durability of the company’s moat in creative software may be at risk due to advancing AI competition.
In other recent news, Adobe has been the focus of several analyst updates and industry discussions. UBS lowered its price target for Adobe to $400 from $430, maintaining a Neutral rating. This adjustment comes as UBS analyst Karl Keirstead evaluated current demand trends for Adobe’s offerings. RBC Capital, however, reiterated its Outperform rating with a $480 price target, despite acknowledging increased competition in the creative tools market. Meanwhile, 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. DA Davidson maintains a Buy rating with a $500 price target, highlighting the growth of Figma, which reported $821 million in revenue over the last twelve months. Redburn-Atlantic also downgraded Adobe to Sell, reducing its price target to $280 from $420, due to concerns about generative AI tools eroding Adobe’s competitive edge. These developments reflect a variety of perspectives on Adobe’s position in the rapidly evolving tech landscape.
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