Morgan Stanley downgrades Adobe to Underweight and cuts target to $240 from $365

Morgan Stanley moved Adobe from Equal-weight to Underweight and cut its price target to $240 from $365, with analyst Adam Wood citing several changes happening at once. The firm pointed to the shift to a freemium model, a simultaneous CEO and CFO transition, heavier AI spending and generative-AI risk to Creative Cloud. Shares closed around $227 on July 21.

• Rating: Equal-weight to Underweight
• Price target cut from $365 to $240
• Shares closed around $227 on July 21
• Reasons: freemium shift, CEO and CFO transition, AI spending, generative-AI risk