Design software developer Adobe (ADBE) is slated to report fiscal second-quarter earnings after the bell Thursday, and investors are expecting a relatively modest share movement to follow.
Options pricing suggests traders anticipate Adobe stock to move about 6.6% in either direction the day after its earnings report. A move of that scale would lift shares to roughly $440, their highest level in three months, or drop them to about $386, a one-month low.
Adobe shares slipped 0.8% to $412.84 on Wednesday. The stock is down about 7% since the start of the year.
Adobe stock has registered an average post-earnings move of 12.6% over the past four quarters, and fell in three of those instances. A 6.6% gain or loss on Friday would represent the stock’s smallest post-earnings move since December 2023.
In March, shares dropped nearly 14% the day after Adobe reported record quarterly revenue but issued an outlook that underwhelmed investors. In December, it was a similar story: a worse-than-expected forecast sent shares tumbling more than 13%.
Most analysts are bullish on Adobe’s long-term outlook. Of the 17 Adobe analysts tracked by Visible Alpha, 10 rate the stock a “buy,” six are neutral, and one rates it a “sell.” The average price target of about $477 is more than 15% above the stock’s closing price on Wednesday.
Morgan Stanley analysts earlier this week said investor concerns about Adobe’s long-term competitiveness and generative AI opportunity should help Adobe “step over a low bar” when results come out Wednesday. The bank assigns the stock an “overweight” rating and an above-consensus price target of $510.
:max_bytes(150000):strip_icc()/GettyImages-2217925585-3479b1807cd946f5adbadcc25b5e90d2.jpg?ssl=1&description=Here%E2%80%99s+Where+Traders+Expect+Adobe+Stock+To+Go+After+Earnings){kind=link}