The stock's rise followed the company's midquarter update Tuesday afternoon in which Adobe merely reiterated the forecast it gave in June. But for investors, worried that an expected sales trough might force the company to reduce its guidance, that was good enough.
Instead of worrying about the near term, investors can now focus on the future, says one buy-side analyst whose firm has no position in Adobe but who asked to remain nameless. Early next year, the company expects to release a new version of its flagship suite of software for creative professionals, which should boost Adobe's results and stock, the analyst says. That gives investors a reason to buy the stock again.
"In this market, people are freaked out about just about anything," says the analyst. "They don't want to be invested in anything without visible catalysts ahead of them."Investors were definitely excited about Adobe following its update -- but in a good way. In recent trading, the company's shares were up $4.16, or 14.7%, to $32.50. Earlier in Wednesday's session, the company's stock traded as high as $32.58. In its midquarter update, Adobe said it still expects to post a profit of 13 cents to 16 cents a share -- 25 cents to 27 cents excluding options and acquisition costs -- on sales ranging from $580 million to $610 million in its quarter ending Sept. 1. That matches the company's previous