Adobe Systems Incorporated (ADBE) Benefits Boost a Boon to Shares

Adobe Systems Incorporated (ADBE) is extending paid leave for parents

Aug 10, 2015 at 2:57 PM
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For the third time in the past week, a major U.S. tech firm has enhanced benefits for new parents. Specifically, Adobe Systems Incorporated (NASDAQ:ADBE) is boosting paid maternity leave to 26 weeks from 12 weeks, with fathers and other primary caregivers eligible for 16 weeks of paid leave. In so doing, ADBE joins Microsoft Corporation (NASDAQ:MSFT) and Netflix, Inc. (NASDAQ:NFLX) as industry leaders in fostering a culture of better work-life balance.

Wall Street is responding positively to the news, with ADBE up 1.3% at $83.77 -- following in the footsteps of the broader equities market. The shares now sport a year-to-date gain of more than 15%, and are within a chip-shot of their late-June record high of $84.36.

Amid this steady uptrend, short-term option traders have gravitated toward calls over puts. Specifically, ADBE's Schaeffer's put/call open interest ratio (SOIR) sits at 0.24, with call open interest roughly quadrupling put open interest among options with a shelf-life of three months or less. If that's not enough, the stock's SOIR has never been lower, looking back 12 months.

Echoing this optimism, ADBE's 10-day call/put volume ratio is 2.19 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Not only does this reading indicate calls have been bought to open at more than twice the rate of puts in recent weeks, it also ranks in the top quartile of its annual range.

However, not all analysts are sold on Adobe Systems Incorporated (NASDAQ:ADBE). Five of 13 brokerages still rate the equity a "hold," and its average 12-month price target of $88.55 stands at a less than 6% premium to its current perch. In other words, a round of upgrades and/or price-target hikes could be just around the corner.

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