Shares of Adobe Inc (NASDAQ:ADBE) are sinking 8% to trade at $248.25 before the opening bell, as investors struggle to digest news that CEO Shantanu Narayen will be stepping down as soon his a successor is appointed. Narayen will remain chair of the board, however. The news is overshadowing the a fiscal first-quarter earnings and revenue beat.
ADBE has struggled on the charts for years, most recently tapping a Feb. 24, seven-year low of $244.28. Sporting a year-to-date deficit of 38.5%, today's news will add more weight and leave shares on track for a fifth-straight drop and its worst daily performance in a year.
No fewer than nine analysts have slashed their price targets in response, with a downgrade to "equal weight" from "overweight" and price cut to $275 from $335 out of Barclays. Heading into, nearly 50% of the covering firms carry a "hold" or worse rating.
Options traders lean extremely bullish toward the tech leader. This is per ADBE's 50-day call/put volume ratio of 1.95 over at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 95% of annual readings. Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) of 0.62 ranks in the 6th annual percentile.
Lastly, Adobe stock's Schaeffer's Volatility Scorecard (SVS) comes in at 81 out of 100. In other words, shares have consistently realized higher volatility than its options have priced in over the past 12 months.
