TLDR
- Goldman Sachs analyst Gabriela Borges cut her price target on ADBE from $290 to $220, maintaining a Sell rating
- CEO Shantanu Narayen is stepping down after 18 years, creating leadership uncertainty
- Goldman cited AI competition eroding Adobe’s low-end market as a key risk
- Adobe’s revenue and EPS growth trail peers, with 10% NTM vs peers at 11% and 18% respectively
- Wall Street’s average price target sits at $322–$345, well above Goldman’s bearish call
Adobe has had a rough stretch, and Goldman Sachs isn’t making it any easier.
On March 16, analyst Gabriela Borges maintained her Sell rating on Adobe (ADBE) and slashed her price target from $290 to $220 — a cut of more than 24%. The stock closed Tuesday at $254.20, up 0.93% as markets attempted a mild recovery after a bruising week.
The drop in target reflects growing unease on Wall Street about where Adobe goes from here.
The headline shock came earlier: CEO Shantanu Narayen, who has led the company for 18 years, is stepping down. Borges said the stock’s after-hours decline was a direct reaction to the news, describing it as “uncertainty until Adobe’s next CEO is announced.”
That uncertainty is amplified by timing. Adobe is navigating this leadership change at the same moment AI tools are reshaping the creative software space.
Borges specifically flagged that the “CEO transition introduces too much uncertainty while AI competition continues to erode the low end of the market.” Free and low-cost AI image generation tools are cutting into demand for Adobe’s photo products, particularly among casual users who no longer need a subscription to produce decent visuals.
The question isn’t just who runs Adobe next — it’s what strategy they bring with them.
Valuation Concerns
Even with ADBE down sharply from its highs, Goldman isn’t convinced it’s cheap enough. When Borges took over coverage, she applied a 50% discount to peers, citing weaker growth metrics.
Adobe’s next-twelve-month revenue growth is pegged at 10%, slightly below the peer average of 11%. More telling is the EPS growth gap — Adobe is projected at 10% NTM versus 18% for comparable software firms.
Those aren’t catastrophic numbers, but they make it hard to justify a premium valuation when competitors are growing faster and facing less leadership disruption.
Other Analysts Pull Back Too
Goldman wasn’t alone in trimming targets. Multiple analyst actions landed on March 13, just ahead of the Goldman note.
Piper Sandler’s Billy Fitzsimmons cut his target from $330 to $280 while holding a Neutral rating. Keybanc’s Jackson Ader dropped his target from $310 to $235, keeping an Underweight rating. Barclays’ Saket Kalia went a step further, downgrading Adobe from Overweight to Equal-Weight and lowering the target from $335 to $275.
Not everyone is pessimistic. Mizuho’s Gregg Moskowitz kept an Outperform rating, though he also trimmed his target from $340 to $315.
The broader Wall Street picture is mixed. Based on nine Buys, 13 Holds, and three Sells over the past three months, the consensus sits at Hold. The average price target across analysts lands around $322–$345 — well above where Goldman is sitting.
The gap between Goldman’s $220 target and the Street’s average of $322 is wide. That divergence reflects genuine disagreement about how much the CEO transition and AI headwinds will weigh on the business.
Adobe’s stock remains under pressure as investors wait for clarity on who will take the top job.
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