This article first appeared on GuruFocus .
Adobe ( NASDAQ:ADBE ) faces a more cautious outlook from Citi, which lowered its rating on the software company to Sell from Hold and cut its price target to $207 from $250.
The downgrade reflects concerns about Adobe's growth trajectory in fiscal 2027, as leadership changes and adjustments to its Creative business strategy add uncertainty ahead of its next earnings report.
Incoming CEO Anil Chakravarthy is set to take the helm while the company has yet to fill its CFO and Digital Media leadership roles. Citi analyst Tyler Radke expects Adobe to provide a weaker fiscal 2027 forecast when it reports fourth-quarter results in early December.
Citi also reduced its estimates for net new annual recurring revenue, which measures additional subscription revenue expected over a year. The bank lowered its fiscal 2027 estimate by $470 million to $1.5 billion and its fiscal 2028 projection by $500 million to $1.45 billion.
Adobe plans to report fiscal 2026 fourth-quarter results after the market closes on Dec. 9. Wall Street expects adjusted earnings of $6.33 per share on revenue of $6.83 billion, compared with $5.50 per share and $6.19 billion in the year-earlier quarter.
