Adobe (ADBE) is expected to report solid Q2 results, with focus likely on competition and GenAI monetization, RBC Capital Markets said in a note Thursday. The results are due June 12.

"We would expect solid headline numbers in Q2, but guidance and the strategic outlook will remain the key to shifting the narrative around investor sentiment," RBC analysts said.

The analysts, including Matthew Swanson, said that Adobe shares are still lagging behind mega-cap peers even as investor sentiment has stabilized during Q2.

"Competitive concerns and an increased focus on the timing of GenAI monetization have weighed on investor sentiment through 2024 and into 2025," they said.

Still, the analysts said they continue to believe that Adobe represents an attractive mix of growth, margin, and macro durability that positions it well through 2025.

RBC kept its outperform rating and $480 price target on Adobe.

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