Despite Inflation Fears, Adobe's Valuation Has Increased

Back in February, we wrote an article about Adobe (NASDAQ:ADBE) and placed a price target of $530. This was right before inflation fears became mainstream. After a wild few months, the share price has now met and exceeded $530. As a result, we wanted to do a follow-up on the company.

Here are the main points of our newest report: 
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• In our previous article, we placed a $530 intrinsic value on Adobe. 
• Since then, the price of Adobe has exceeded our target, and we estimate its intrinsic value has increased. 
• Valuation is valid only while discount rates remain low. 
• Adobe's business is inflation resistant due to its market dominance. 

Lately, the biggest concern facing investors is whether or not inflation will be transitory or if the FED will lose control and be forced to jack up rates. A lot of companies are facing shortages and increasing material costs which will result in companies either taking the hit to their margins or passing the costs to the consumers.

​As a result, the best companies to own in this type of environment are those with high margins or considerable pricing power with consumers. Adobe happens to have both. We've already established that customers are unwilling to switch to alternatives and will pay whatever Adobe wants them to pay. Read more:
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*This is a premium seeking alpha article, so we can’t fully post it here.*   

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