Adobe (ADBE) was in focus on Friday as Citi cut its price target on the Photoshop maker ahead of its fiscal first-quarter results, set to be released on March 12.
“We remain Neutral-rated on ADBE into FQ1 earnings where we expect a continued focus on leveraging the freemium funnel/expanding new users to increase monetization as we look for signs of ramping Firefly adoption/monetization,” analyst Tyler Radke wrote in a note to clients. “For the print, investors will likely be focused on new topline metrics of total ADBE ARR, BP&C revenue and C&M revenue and watching closely for any early signs of growth acceleration. We believe [operating] margins revisions will also be in focus, as investors eye GM pressure from 3P models and ongoing investments. We expect metrics to slightly exceed guidance and see minimal upside revisions to the FY26 outlook.”
Radke lowered his price target on Adobe to $315 from $387.
Delving deeper, Radke said login traffic to Adobe remained “stable” in the first-quarter, with mid-to-high teen growth. However, that may be coming from customers coming at lower price points, via Express, Firefly or the company’s freemium apps. He also pointed to heavy discounting in late January and February, when Creative Cloud Pro was marked down 40% for individuals ($41.99 per month) and teams ($59.99 per month) for first-time users. First-time students and teachers saw an 80% discount, at $12.49 per month.