Bank of America reinstated coverage of Adobe with an Underperform rating and a $190 price objective, arguing that generative AI is eroding the software maker's competitive position. Analysts led by Tal Liani set the price target based on 7 times projected 2027 enterprise value to free cash flow, a discount to the roughly 9.7-times average for a broad group of software peers. The stock closed at $218.07 on Monday, down 70% from its 2024 peak. The bank models total revenue growth slowing from 10.5% in 2025 to 8.8% in 2027, with no clear path to near-term reacceleration. AI-first annual recurring revenue still represents less than 2% of Adobe's total ARR. The analysts also flagged pressure on Adobe Stock, which has declined for two consecutive quarters, and warned that the simultaneous departures of CEO Shantanu Narayen and CFO Dan Durn heighten risk around strategy and leadership stability.
Adobe Systems IncorporatedBofA argues generative AI is eroding Adobe's competitive position, leading to an Underperform rating.
Bank of America Corp