4 big analyst picks: Adobe upgraded to Outperform on AI potential

Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades at Adobe, Shell, Grab, and XP.

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Adobe upgraded to Outperform

Adobe Systems (NASDAQ:) was upgraded to Outperform from Market Perform at BMO Capital with a price target of $570.00 (from $500.00), as reported in real time on InvestingPro.

The firm attributes the upgrade move to the anticipation that the addition of new users and improvements in price/mix will counterbalance any efficiency gains from generative AI. The initial beta release of Firefly has attracted substantial interest from millions of users, reinforcing BMO’s perspective.

Furthermore, positive feedback from BMO’s survey suggests that new annual recurring revenue can remain around $1.8 billion through fiscal 2024. The firm believes there is still upside potential in the stock compared to other large-cap growth stocks.

Last week, the company reported its Q2 earnings, with of $3.91 and revenue of $4.82 billion coming in better than the consensus estimates.

Shell upgraded at Morgan Stanley

Morgan Stanley upgraded Shell (NYSE:) 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:) to Neutral from Underweight with a price target of $3.10.

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

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