Adobe Stock Trading at Record Highs Due to Continued Work From Home Orders
When trading closed on Friday, June 13, Adobe stock came close to hitting a record as most traders raised their target on Adobe stock due to the Coronavirus pandemic. Adobe, a software company known for Photoshop and many other programs, has seen its stock skyrocket during the pandemic due to the work from home orders.
The final bell on Friday saw Adobe stocks rise by 4.9 percent to close at $406.54. This was just 28 cents shy of the record Adobe set on Wednesday, June 11 of $406.82. This came not long after the stock rose six percent to $411.72 earlier in the day.
On Thursday, Adobe released its earnings report that projected revenue of $9.17 billion for the subscriptions it offers to customers for digital media. The annual recurring revenue (ARR) is expected to be a record for Adobe.
Analysts High on Adobe Stock
There are 28 analysts assigned to cover Adobe. Of those 28, 19 have assigned ratings of buy or overweight to the company’s stock. Eight of those 28 analysts have assigned hold ratings to the stock and one analyst issued an underweight rating for the stock. Of the 28 analysts, 15 increased the price target of the stock, which brought the average target to $414.44. This was an increase from the previous average of $365.65.
Sterling Auty is an analyst for JPMorgan. Auty issued an overweight rating for the Adobe stock and increased the price target from $325 to $430. Auty said that investors have looked past the light revenue numbers for the quarter because they were prepared for the worst of the pandemic. Auty noted that the ARR numbers were what mattered the most.
“The beat in ARR and durability of Creative Cloud is likely to be well received by investors, as will the impressive margins and upside in EPS,” Auty said.
Third-Quarter Adjusted Earnings
Adobe released forecasted adjusted earnings for the third quarter. The adjustment came in the form of $2.40 per share on revenue of $3.15 billion. The changes come after stock analysts projected earnings of $2.46 on revenue of $3.26 billion. As of the end of trading on Friday, June 13, the consensus came in at $2.41 per share for earnings on $3.16 billion in revenue.
Adobe Software is Critical During the Pandemic
Adobe software has been deemed critical during the pandemic by businesses, individuals, stock analysts, and many other professionals. The software programs available for purchase allow for paperless workflows, online content, digital experiences, and more.
Daniel Ives is an analyst for Wedbush. Ives increased his price target to $410 from $315 and issued a neutral rating.
“As we have seen from other tech stalwarts during earnings season, Adobe continued the trend as the strong get stronger with the company’s Creative and Digital product footprint seeing no signs of slowing down,” Ives said.
“The subscription and sticky element of the company’s product portfolio on both the consumer and enterprise front are key strengths enabling Adobe to show the Street that its business model can withstand this unprecedented backdrop without skipping a beat,” Ives continued.
Adobe Experiencing Solid Year Overall
Overall, Adobe is experiencing a solid year with its stocks. For the year, shares are up 23 percent, which is a direct contrast to the 6 percent decline of the S&P 500 Index. The 23 percent is also compared to just a 7 percent increase in the Nasdaq Composite Index, which is very tech-heavy. Adobe’s 23 percent increase is well above the 14 percent increase for the year for the iShares Expanded Tech-Software Sector ETF.
Leave a Reply