** Shares of Photoshop maker Adobe ADBE.O down 1.5% at $356.5 premarket after Morgan Stanley downgrade

** MS cuts to "equal-weight" from "overweight," slashes PT to $450 from $520 citing AI monetization shortfall

** Brokerage says Adobe's Direct Gen AI monetization has lagged initial investor and MS' expectations, lacks near-term catalysts

** "Limited visibility into size and magnitude of AI-displacement headwinds with consumers, simple marketers, and business users lowers our conviction in the net impact to Creative Cloud and Digital Media growth," MS says

** 27 of 41 brokerages rate stock "buy" or higher, 12 "hold" and 2 "sell" or lower; median PT $460 - data compiled by LSEG

** ADBE down nearly 19% YTD, as of last close

(Reporting by Kanchana Chakravarty in Bengaluru)

((Kanchana.Chakravarty@thomsonreuters.com))