Adobe Stock Boosted by Reaffirmed 2022 Forecast

Options bulls are targeting the beaten down stock

Digital Content Manager
Oct 19, 2022 at 11:02 AM
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Adobe Inc (NASDAQ:ADBE) is up 1.4% at $297.25 this morning, after the software giant reaffirmed its fiscal 2022 outlook. The company also shared a 2023 forecast, expecting total revenue between $19.1 billion and $19.3 billion, and non-GAAP earnings per share (EPS) of $15.15 to $15.45. The forecasts exclude Adobe's recent Figma acquisition, which isn't expected to close during 2023. 

Several analysts have lowered their price targets in response to today's news, with the lowest adjustment from Cowen and Company to $370 from $400. The 12-month consensus price target now sits at $368.77, marking a 23.6% premium to current levels. The brokerage bunch has been hesitant on ADBE, with 13 of the 23 in coverage calling it a "hold." 

Options traders, on the other hand, have been incredibly bullish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Adobe stock sports a 50-day put/call volume ratio of 1.59, which sits higher than 100% of readings from the past year. This means long calls haven't been more popular during the past year than they have been during the past 10 weeks. 

These traders are targeting calls at an elevated clip today, too. So far, 16,000 calls have been exchanged, which is double the intraday average, compared to 8,845 puts. The most popular position is the November 320 call, followed by the 270-put in the same monthly series, with positions being opened at both. 

Adobe stock is struggling to break above the $300 threshold, which has kept gains in check since last month's Figma deal sent the stock spiraling. The stock managed to regain footing at the 20-day moving average last week, though it's still sitting at a 47.2% year-to-date deficit. 


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