Citi expects Adobe shares to trade down following Q3 beat

Citi says that into relatively high expectations, Adobe matched last quarter’s larger $44M beat on key metric digital media net new annual recurring revenue but with upside almost entirely coming from Document Cloud versus Creative Cloud again. The Q4 guidance was the most disappointing, missing implied consensus on virtually all top-line metrics, which is driving a sell-off in shares, the analyst tells investors in a research note. Citi expects the stock to trade down on Document Cloud strength versus Creative Cloud the weaker Q4 outlook. It keeps a Neutral rating on the shares.