David Tran
- Adobe’s (NASDAQ:ADBE) recent pricing changes for Creative Cloud All apps in North America should boost 2025 growth by 150 to 200 basis points, Morgan Stanley said.
- “FY25 targets include the change, but we are bullish on FY26 growth given tailwinds extend through ~1H & an opportunity to expand to more [geographies],” analyst Keith Weiss wrote in a note to clients.
- The company introduced a tiered pricing model for individual users: the price of the standard plan was cut between 8% and 9%, but the pro plan was increased between 17% and 18%. Additionally, the company made changes to its student and teacher plan, which Weiss said will be 14% higher than previous pricing.
- “Looking ahead, our analysis points to an additional 1.6 points that can be recognized from renewals through FY26 and 2.2 points from rolling out price changes to geographies beyond North America,” Weiss wrote. “We see the pricing change as solidly following management’s strategy to push innovation at the high-end of the portfolio (“Pro”, “Pro Plus” plans) and monetize via price, meanwhile be more nimble on pricing down-market (“Standard” plans) as the competitive landscape becomes increasingly crowded.”
- Weiss kept his Overweight rating and $510 price target on Adobe.
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