Adobe Stock Trips After Dismal Guidance

Adobe's current-quarter outlook fell short of expectations

by Patrick Martin

Published on Mar 15, 2019 at 10:11 AM

The shares of Adobe Inc (NASDAQ:ADBE) are struggling today, down 5.2% to trade at $253.78, after the software company's current-quarter forecast came in below analyst estimates. The firm did, however, report fiscal first-quarter earnings and revenue that exceeded expectations, thanks to growth in its digital media business. 

Analysts have been quick to react. At least five brokerages issued price-target hikes, including Canaccord Genuity to $300. On the other hand, KeyBanc downgraded Adobe stock to "sector weight" from "overweight," and Cowen trimmed its price target to $275 from $280. 

Just like today, overall analyst sentiment is mixed. Of the 24 brokerages covering ADBE, 14 rate it a "buy" or better, and 10 rate it a tepid "hold," with zero "sells" on the books. Meanwhile, the average 12-month price target of $292.11 is a 15% premium from the stock's current perch. 

Today's drop puts the shares at risk of snapping a four-day winning streak, though ADBE is still boasting a 12.3% year-to-date gain. Despite the pullback, the shares seem to have found support at their 40-day moving average, which has cushioned Adobe retreats for most of 2019.

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