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Adobe, Salesforce Fall Following UBS Downgrade

© Reuters.

By Sam Boughedda — Adobe Systems Incorporated (NASDAQ:ADBE) shares closed Wednesday’s session down more than 7% after UBS analyst Karl Keirstead downgraded shares of the company and Inc (NYSE:CRM) to neutral from buy based on concerns over 2022 growth. Salesforce closed the session down 8%.

The analyst set a $575 price target on Adobe, down from $635. The analyst said they spoke to 14 large businesses about their Adobe spending outlook for 2022 to assess why its growth metrics have now disappointed for two straight quarters. 

The analyst then explained that “bottom line, we worry that more “front-office/marketing” tech spend was pulled-forward in 2020/2021 than most investors think, pressuring Adobe’s growth rate in 2022.”

Keirstead set a price target of $265, down from the prior $315 on Salesforce. 

Speaking on the company, the analyst explained that “spending on front-office sales, marketing and customer engagement software accelerated over the last 18 months, not surprising given the dislocation in post-COVID customer buying behavior.”

However, the UBS analyst added that while many of Salesforce’s customers are planning similar levels of front-office spending growth in 2022, numerous others are already beginning to moderate their spending. 

“It seems likely that Salesforce’s organic growth will moderate in 2022, which may out-weigh the positive associated with the improving margin narrative,” Keirstead stated.

Adobe, Salesforce Fall Following UBS Downgrade

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