Adobe Inc (NASDAQ:ADBE) shares fell on Friday after several Wall Street analysts lowered their price forecasts following the company’s quarterly results and the announcement that CEO Shantanu Narayen plans to step down.

Analysts Cut Price Forecasts After Earnings

Analysts said Adobe delivered solid results, but the numbers failed to boost confidence as investors assess the company’s transition to generative AI and the leadership change.

KeyBanc analyst Jackson Ader lowered his price forecast to $235 from $310. RBC Capital’s Matthew Swanson reduced his forecast to $400 from $430, while TD Cowen analyst Derrick Wood trimmed his forecast to $310 from $325. Bank of America Securities analyst Brad Sills maintained a Buy rating with a $460 price forecast.

Leadership Change Raises Questions About Strategy

Several analysts said Narayen’s planned departure after 18 years as CEO added uncertainty.

Wood said the leadership transition comes as investors debate how artificial intelligence will reshape Adobe’s business.

Ader also noted that Adobe will launch a search for a successor while Narayen remains CEO until a replacement is named.

Analysts said the leadership shift adds another variable as the company navigates its shift toward generative AI tools.

AI Growth Strong, But Revenue Momentum Under Scrutiny

Adobe reported $6.4 billion in revenue, beating estimates by about $119 million. However, analysts focused on annual recurring revenue growth of 10.9%, which some viewed as modest.

Swanson said AI adoption is gaining traction, with AI-first ARR nearly tripling year over year to about $400 million and Firefly ARR reaching $250 million.

Generative AI usage also increased, with credit consumption rising 45% sequentially, while freemium users surpassed 80 million.

Still, analysts pointed to headwinds from Adobe’s stock image business, where customers are shifting to AI-generated content.

Wood added that Adobe expects stronger revenue conversion in the second half, making the outlook a “show-me” story for investors.

ADBE Price Action: Adobe shares were down 5.70% at $254.40 at the time of publication on Friday, according to Benzinga Pro data.

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