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4 big analyst picks: Adobe nabs another buy rating on AI.


© Reuters

Adobe upgraded to Outperform

Adobe Systems (NASDAQ:ADBE) was upgraded to Outperform from Market Perform at BMO Capital with a price target of $570.00 (from $500.00).

The firm is particularly positive on Adobe's generative AI product, Firefly, the initial beta release of which has attracted substantial interest from millions of users. BMO said it believes Firefly "can capture price/mix, as well as new users." It added that upside looks to be in the cards:

Although the stock has moved higher over the past few months, we nevertheless believe that upside to the stock remains, particularly when compared with other large cap growth stocks.

Furthermore, BMO says positive feedback from its survey on the Adobe Express product suggests that new annual recurring revenue can remain around $1.8 billion through fiscal 2024.

Wells Fargo also upgraded Adobe earlier this month on its AI potential.

And last week the company beat on Q2 earnings, with EPS of $3.91 and revenue of $4.82 billion coming in better than Wall Street expectations.

Shell upgraded at Morgan Stanley

Morgan Stanley upgraded Shell (NYSE:SHEL) to Equalweight from Underweight. Initially, the bank anticipated that a decrease in the quarterly buyback rate would lead to a period of underperformance. “Although buybacks are indeed guided to be lower in 2H than 1H, other parts of Shell's investment thesis surprised positively at the recent CMD,” said the firm.

The company is set to report its Q2/23 earnings next month. Street estimates stand at $1.86 for EPS and $72.09B for revenues.

2 more upgrades

JPMorgan upgraded Grab Holdings (NASDAQ:GRAB) to Neutral from Underweight with a price target of $3.10.

BofA Securities upgraded XP (NASDAQ:XP) to Buy from Neutral and raised its price target to $29.00 from $16.00.


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