Citi Downgrades Adobe to Sell Amid Concerns Over AI Competition and Growth Slowdown
Citigroup analyst Tyler Radke has downgraded Adobe (ADBE) from Neutral to Sell, lowering the price target from $250 to $207. The downgrade stems from concerns that Wall Street's growth estimates for fiscal 2027 may be overly optimistic, citing increased competitive pressure from artificial intelligence and shifts in the small business market. While Adobe reported record revenue of $6.76 billion in its third fiscal quarter of 2026, profit growth has shown a decelerating trend, dropping from 12% in Q1 to 8% in Q3. Despite these headwinds, the company continues to bolster earnings per share through aggressive stock buybacks, which reduced the diluted share count by approximately 7% year-over-year. The market reaction was muted following the downgrade, with shares gaining roughly 1%. However, Adobe has faced a difficult year, with its stock price declining approximately 31% in 2026 as investors weigh long-term growth prospects against emerging AI technologies.