Adobe's (ADBE) shares are fairly valued and offer limited downside risks, KeyBanc Capital Markets said Friday, while acknowledging that it "overreacted" to the software company's disclosure changes last week.

The brokerage upgraded Adobe to sector weight from underweight.

"The stock has not performed well on either an absolute or a relative basis for a while now and the valuation is more in line with where we believe fair value should be," KeyBanc analysts including Jackson Ader said in a note. "We see the downside and upside as more evenly balanced at this point."

Adobe said March 12 that creative and document cloud revenues and annualized recurring revenue will not be disclosed going forward, according to the brokerage.

"We were pretty heated last week when the creative and document cloud ARR disclosures were taken away," Ader said. While the brokerage is still bothered by Adobe getting rid of the ARR metrics, Ader said that additional information provided by management during an investor meeting on Tuesday helped ease concerns.

Last week, the software maker said it will disclose subscription revenue by the business and consumer group and the creative and marketing professionals group. At the time, Adobe reported record fiscal first-quarter revenue that topped expectations and a bigger-than-projected increase in earnings per share.

"With the new segment disclosure, we can now back into an estimation of what Acrobat and express contribute to the business and to the former creative cloud revenue segment," KeyBanc's Ader said. However, "the piece of the business that we and investors view as most under threat from competition, the non-creative professional piece of the creative cloud, will be harder to discern going forward."