Exane BNP Paribas upgraded Adobe Inc. (ADBE, Financial) to Neutral from Underperform and raised the stock's price target to $425. The analyst views better risks and rewards consideration on Adobe for its effort in resolving the near-term concerns including rising competition and heightened pressure on customer trust.

In June 2024, Adobe made some changes to its Terms of Use and stated that its customer content is not utilized to train generative AI tools and Adobe does not access content saved on local devices. Adobe has also promised extra transparency by providing users the ability to opt out from some tracking that included in product-betterment programs.

This allowed Adobe to become one step ahead from its competitors to rebuild customers trust and to keep its reputation in its industry. The next quarter results began to bear fruit from these efforts. Adobe's Q3 2024 revenue grew 11% to $5.41 billion compared to $4.89 billion in the year prior. And revenue ticked in the following quarter, in Q4 2024, with $5.61 billion.

Exane BNP Paribas believe Adobe are doing a very good job in dealing with challenges and believe they are well set up to continue growing and remain at the top.