Adobe reported fiscal third-quarter results on September 10, 2026, showing its total user base topped one billion people for the first time in company history, yet Morgan Stanley reiterated an Underweight rating and a $240 price target on the stock the following day. Revenue reached $6.76 billion, up 13% year over year, non-GAAP earnings per share climbed to $6.13, up 15%, and total annualized recurring revenue reached $27.5 billion, while creative freemium users including Firefly and Express surpassed 100 million, up more than 70% year over year. Morgan Stanley analyst Adam Wood kept the $240 target, nearly 5% below Friday's close of $252.23, citing full-year annualized recurring revenue growth guidance held at 10.2% and operating margin guidance held at 45%, remaining performance obligations growth that slowed to 8% from 12% to 13% earlier in the year, and a fourth-quarter net new annualized recurring revenue requirement of roughly $775 million, nearly double the third-quarter total, which itself fell 38% from a year earlier. Adobe also announced on September 3 that Anil Chakravarthy will become president and CEO on December 1, succeeding Shantanu Narayen as executive chair, a handoff Morgan Stanley flagged alongside an interim finance chief and an unproven monetization strategy. Fourth-quarter revenue guidance of $6.8 billion to $6.85 billion left investors wanting more, and about 9.5 million shares were repurchased during the quarter.
Adobe Systems IncorporatedAdobe topped one billion users with 13% revenue growth and $6.13 EPS, but Morgan Stanley reiterated Underweight with a $240 target on slowing RPO growth and a steep Q4 net-new ARR requirement.
Morgan StanleyMorgan Stanley reiterated an Underweight rating and $240 price target on Adobe, nearly 5% below the prior close, citing slowing RPO growth and demanding Q4 ARR requirements.
