Adobe Stock Drops After Close-Call Revenue Report

Several members of the brokerage bunch raised their price targets

Deputy Editor
Sep 22, 2021 at 9:53 AM
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The shares of Adobe Inc (NASDAQ:ADBE) are down 4.3% at $617.98 this morning, following the software company's fiscal third-quarter earnings report. While Adobe's earnings topped analysts' expectations, its revenue just barely came in above estimates, though Adobe did note revenue growth of 22% year-over-year. Its current-quarter revenue forecast also just skimmed past expectations. 

The brokerage bunch has been chiming in with mostly bullish sentiment, with the exception of BMO, which cut its price target to $720 from $730. Meanwhile, no fewer than six analysts lifted their price targets -- the highest coming from Jefferies to $760. 

Coming into today, analysts were already overwhelmingly optimistic. The 12-month consensus price target of $699.19 is a 13.1% premium to current levels, and all 16 in coverage consider ADBE a "strong buy." 

Options traders, on the other hand, have rarely been more bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ADBE sports a 50-day put/call volume ratio of 1.27, which stands higher than 94% of readings from the past 12 months. 

The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.39, which stands in the 98th percentile of its 12-month range, reflects this sentiment. This implies short-term options traders have rarely been more put-biased. 

Analysts' upbeat coverage isn't unfounded. Adobe stock has added roughly 23% in 2021, and is just coming off a record high of $673.88, hit on Sept. 3. While the equity has recently lost long-time support from several moving averages -- most recently its 30-day -- the stock could find its footing at the $620 level, which acted as a floor in mid-August. 

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