Rare Bear Notes Hit Adobe Stock After Weak Guidance

Five brokerages have issued price-target cuts this morning

Managing Editor
Sep 18, 2019 at 9:51 AM
facebook twitter linkedin


The shares of Adobe Inc (NASDAQ:ADBE) are down 3.6% to trade at $275.82 this morning, after a mixed quarterly report. The software company reported adjusted fiscal third-quarter earnings of $2.05 per share on $2.83 billion in revenue, topping forecasts for a $1.97 per-share profit on $2.82 billion in revenue. However, Adobe also trimmed its current-quarter revenue guidance, citing slow growth from its marketing software unit Marketo. 

To analysts, the weak forecast overshadows the earnings and revenue beats. So far, five brokerages have issued price-target cuts, the lowest coming from BMO and Instinet to $310. The analyst in coverage at RBC thinks these revenue issues will remain over the next few years, but believes ADBE will remain at a premium valuation. 

This is pacing to be Adobe stock's worst day in over a month, and puts it on pace to snap a five-day winning streak. Since a July 19 record high of $313.11, ADBE has given back 12%. During this skid, the shares' descending 30-day moving average has kept a lid on breakouts. Nevertheless, the equity is still up 22% on the year. 

The security is at risk for more bearish analyst attention though, and that could keep the pressure on. Of the 21 brokerages covering ADBE, 14 rate it a "buy" or better, with zero "sells" on the books. In addition, the equity's consensus 12-month price target of $313.19 is now a nearly 14% premium from its current perch.

 

  

These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!

 

Common mistakes options traders make
 


 


 
Special Offers from Schaeffer's Trading Partners