By Senad Karaahmetovic
Just a day after Adobe (NASDAQ:) shares were downgraded by Mizuho, BMO followed suit and cut to Market Perform from Outperform.
The downgrade call comes just two days before the company reports earnings. Shares of Adobe are down 3% in premarket trading.
The analyst argues that her call is not driven by earnings risk, but rather by the results of the second set of survey data focused on the company’s Creative Cloud.
“Respondents across the board expressed a greater willingness to move away from Adobe Creative Cloud in our August survey compared to our April survey. In particular, younger employees, and employees working for organizations with fewer than 5k employees expressed a higher probability for using competitors to Creative Cloud,” the analyst said in a client note.
As far as earnings are concerned, the analyst sees it as a “neutral event” for shares.
“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,” the analyst concluded.
The price target goes to $435 from $420.
This is the fifth downgrade for Adobe shares in 2022.
