What Are Analysts’ Recommendations for Adobe Stock?
Wall Street analysts’ views on Adobe’s stock
Earlier in this series, we discussed Adobe Systems’s (ADBE) recent announcement of its fiscal 4Q16 and fiscal 2016 results. We saw that in the application software space, Adobe’s peers include Salesforce (CRM), SAP (SAP), and Workday (WDAY). In this final part of the series, we’ll take a look at some market views on Adobe and some of the company’s metrics.
Among the ratings given by the 27 analysts covering Adobe stock, there were no “sell” recommendations. As shown in the chart below, more than 75% of analysts made a “buy” recommendation. The remainder made “hold” recommendations.
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Adobe’s consistent double-digit revenue growth, improving margins, and reasonable debt levels led to a rise in Adobe stock in 2016. However, the company’s stock fell after its fiscal 4Q16 results were announced. Although Adobe’s fiscal 4Q16 results met analysts’ expectations, its guidance failed to meet their estimates.
Fiscal 1Q17 and fiscal 2017 expectations
For fiscal 1Q17, Adobe expects its revenue and EPS (earnings per share) to be ~$1.6 billion and $0.87, respectively. For fiscal 2017, Adobe expects its revenue and EPS (earnings per share) to be ~$6.95 billion and $3.75, respectively. Adobe’s management stated that the 2017 forecast was lowered by $50 million due to foreign exchange fluctuations. Analysts expected Adobe to have $7.0 billion in revenue in fiscal 2017.
Adobe’s price performance
Adobe’s stock price movement over the past month has been negative. On December 16, 2016, the company’s stock fell ~0.51%. In the last year, Adobe’s stock value has risen ~13.3%. In the last 7.5 years, Adobe stock, with minor ups and downs, has been rising consistently.
Analyst target prices
The Wall Street consensus target price for Adobe was $120.92 per share on December 16, 2016. The median target price was $120.00. Adobe’s closing price was $105.10 that day.
Wunderlich reiterated its “hold” rating on Adobe stock and raised its price target to $115.00 from $99.00.
You can invest in the SPDR S&P 500 ETF (SPY) for indirect exposure to the technology sector. SPY invests about 8.4% of its holdings in the application software space.