Adobe (ADBE) is expected to report strong Q1 results on March 12, ahead of the Adobe Summit the following week, RBC Capital Markets said in a note Friday.
Investor attention has mostly centered on Generative AI, creating concerns about competitive pressure as they await more details about GenAI monetization and Adobe Express growth strategies, the investment firm said.
Concerns over GenAI's timing and increased competition have pressured Adobe's stock in 2024, down 19% since Q4 results, compared with a 13% drop in megacap peers and a 6% drop in the S&P 500, RBC said.
Management maintains confidence in its GenAI roadmap but needs to show measurable outcomes with its new product launches, including Firefly Video in beta and additional Firefly plans, RBC analysts noted.
Adobe's job postings increased 15% quarter-over-quarter in Q1 after rising 20% in Q4, showing continued investment in company growth, according to the note.
RBC maintained an outperform rating on Adobe's stock but lowered the price target to $550 from $590.
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