Adobe Stock Falters Despite Bull Notes, Upbeat Forecast

The security remains up over 45% year-over-year, though

Digital Content Manager
Mar 24, 2021 at 10:51 AM
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The shares of Adobe Inc (NASDAQ:ADBE) are down roughly 1% at $455.44 at last check, despite the software name reporting better-than-expected fiscal first-quarter earnings and revenue. The company also announced last night that CFO John Murphy will retire, and raised its current-quarter and full-year outlook beyond analysts' estimates. In turn, the security earned at least four price-target hikes earlier, including one from Jefferies to $610 from $600. However, BMO took a different a route, and lowered ADBE's price objective to $535 from $570.

The past several months have been rocky for Adobe stock. After hitting a Sept. 2, all-time high of $536.88, the security pulled back, with several rally attempts losing steam near the $500 level. Shares have dipped even lower since then, though the 320-day moving average was able to capture the stock's most recent pullback. Year-over-year, ADBE still sports a 45.6% lead.

Analysts were mostly optimistic on the equity coming into today, with 12 calling it a "buy" or better, compared to just two sporting "hold" ratings. Meanwhile, the 12-month consensus target price of $565.88 is a whopping 25.4% premium to current levels. 

Drilling down to today's options activity, 13,000 puts and 13,000 calls have crossed the tape so far, which is three times the intraday average. Most popular is the 3/26 465-strike call, followed by the 500-strike call in the same weekly series, with positions being opened at the former. 

Now seems like a good time to weigh in on ADBE's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 33% sits in the 20th percentile of its annual range. This suggests the equity sports attractively priced premiums at the moment.

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