Adobe slips as Mizuho cuts rating ahead of Q3, citing 'more difficult environment'
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Adobe (NASDAQ:ADBE) shares slipped on Monday as investment firm Mizuho downgraded the cloud software company ahead of its third-quarter results, noting it has faced a "more difficult environment than expected."
Analyst Gregg Moskowitz lowered his rating to neutral from buy and cut the price target to $440 from $480, pointing out that even with a softer global economy, Adobe (ADBE) has had issues and the likelihood of another "guide down" for the fourth-quarter is possible. Additionally, fiscal 2023 estimates are believed to be too high. 
"Our enterprise checks were softer than expected, even allowing for a challenging macro," Moskowitz wrote in a note to clients. "More specifically, we heard of sales cycle elongation across major [geographies], and large deal activity was less prevalent."
Adobe (ADBE) shares fell slightly more than 1% to $390.35 in premarket trading. 
In addition, the analyst noted that a couple of checks "surprisingly" pointed out a reduction in pipeline. Other contacts showed better performance than anticipated, but overall, the past quarter looks to have been difficult for the owner of Creative Cloud.
Adobe (ADBE) is slated to report fiscal third-quarter results on September 15. Analysts expect Adobe (ADBE) to earn $3.35 per share on $4.44B in revenue.
Moskowitz also pointed out that certain parts of Adobe's (ADBE) are "sluggish," especially its Digital Media business and in particular, web traffic, as it looks to have decline 5% sequentially and 13% year-over-year.
However, the Creative Cloud price hike -- implemented on April 27 -- may be a "meaningful top-line driver over time," the analyst noted, with the impact felt more in the third-quarter than it was in the second-quarter. 
In the longer-term, the analyst said that Creative Cloud will allow Adobe (ADBE) to meet "rising demand" from customers, while Document Cloud and Experience Cloud also aid the company. 
But the San Jose, California-based company has "exhibited fundamental choppiness over the past few quarters" and the weakening global economy is likely to "add some pressures," with the stock being range-bound in the near to medium-term. 
Last month, investment firm UBS said Adobe (ADBE) was continuing to take market share away from DocuSign.
Analysts have been mixed on Adobe (ADBE). It had an average rating of BUY from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates ADBE a HOLD.