Adobe Systems Incorporated (NASDAQ:ADBE) released its 2016 Digital Insights Shopping Predictions for the upcoming holiday season. The breadth of data Adobe analyzes has allowed the company to successfully predict consumer spending within two percent in previous years, the most accurate in the industry. Adobe expects an extended holiday season with consumers shopping much earlier and later in the season. For the first time, 53 consecutive days (57 calendar days in total) will exceed $1 billion in online sales, versus 31 consecutive days last year, a 71 percent year-over-year (YoY) increase. Cyber Monday is expected to be the largest online shopping day of all time, generating $3.36 billion in sales with 9.4 percent growth. Sales on Thanksgiving Day will increase 15.6 percent YoY to $2 billion, but not reach the 25 percent YoY increase of 2015. Black Friday will grow 11.3 percent YoY (14.3 percent in 2015) to $3.05 billion.
The extended season will lead to an eleven percent ($9.1 billion) increase in online sales to a total of $91.6 billion. Large retailers* are expected to account for the bulk of the growth, with an average growth rate of 16.6 percent compared to smaller retailers at seven percent. For the average retailer, five percent of consumers are expected to drive 35 percent ($38.5 billion) of all online sales while one percent of product SKUs will account for 74 percent of sales. For the first time mobile devices will exceed desktops in shopping visits, 53 versus 47 percent respectively. However, mobile shopping visits will only account for 34 percent of sales, a 19 percent gap between visits and purchases, likely a consequence of poor mobile shopping experiences. In addition, Adobe data shows that total organic web traffic in North America is stalling with only 0.1 percent growth over the past 42 months.
“We expect to see a five percent spike in online shopping in early November and a record 24 percent increase in the last two weeks of December,” said Mickey Mericle, vice president, Marketing and Customer Insights at Adobe. “‘Click and collect,’ faster shipping and retail promotions starting earlier than ever are all contributing to the extended shopping season. Despite the uptick in sales we expect to see slower growth in total online sales this year.” (Original Source)
Shares of Adobe Systems are currently trading at $107.71, down $0.26 or -0.24%. ADBE has a 1-year high of $111.09 and a 1-year low of $71.27. The stock’s 50-day moving average is $105.63 and its 200-day moving average is $99.33.
On the ratings front, Adobe has been the subject of a number of recent research reports. In a report issued on October 7, Merrill Lynch analyst Kash Rangan reiterated a Buy rating on ADBE, with a price target of $115, which represents a potential upside of 7% from where the stock is currently trading. Separately, on September 27, Cowen’s Derrick Wood reiterated a Buy rating on the stock and has a price target of $120.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Kash Rangan and Derrick Wood have an average return of 5.2% and 1.1% respectively. Rangan has a success rate of 58% and is ranked #657 out of 4188 analysts, while Wood has a success rate of 56% and is ranked #1808.
The street is mostly Bullish on ADBE stock. Out of 14 analysts who cover the stock, 10 suggest a Buy rating and 4 recommend to Hold the stock. The 12-month average price target assigned to the stock is $118.42, which implies an upside of 10% from current levels.
Adobe Systems, Inc. provides digital marketing and digital media solutions. The company operates its business through three segments: Digital Media, Digital Marketing, and Print and Publishing. The Digital Media segment offers creative cloud services, which allow members to download and install the latest versions of products, such as Adobe Photoshop, Adobe Illustrator, Adobe Premiere Pro, Adobe Photoshop Lightroom and Adobe InDesign, as well as utilize other tools, such as Adobe Acrobat. This segment also offers other tools and services, including hobbyist products, such as Adobe Photoshop Elements and Adobe Premiere Elements, Adobe Digital Publishing Suite, Adobe PhoneGap, Adobe Typekit, as well as mobile apps, such as Adobe Photoshop Mix, Adobe Photoshop Sketch and Adobe Premiere Clip that run on tablets and mobile devices. The Digital Media serves professionals, including graphic designers, production artists, web designers and developers, user interface designers, videographers, motion graphic artists, prepress professionals, video game developers, mobile application developers, students and administrators. The Digital Marketing segment offers various solutions, including analytics, social marketing, targeting, media optimization, digital experience management and cross-channel campaign management, as well as premium video delivery and monetization. This segment also offers legacy enterprise software, such as Adobe Connect web conferencing platform and Adobe LiveCycle. The Print and Publishing segment offers legacy products and services for eLearning solutions, technical document publishing, web application development and high-end printing.