Oppenheimer Believes Analog Devices (ADI) Still Has Room to Grow


In a report released today, Rick Schafer from Oppenheimer reiterated a Buy rating on Analog Devices (NASDAQ: ADI), with a price target of $100. The company’s shares closed yesterday at $95.71, close to its 52-week high of $98.38.

Schafer observed:

“ADI reports F2Q (April) results Wednesday morning. We see a beat/raise setup vs. consensus $1.47B/$1.37 and F3Q (July) $1.49B/$1.40 led by continued momentum in core auto/industrial (66% of combined sales) and margin expansion. Mgmt has boosted GM/OM through improving mix and faster-than-promised synergies following the LLTC acquisition. We expect ADI to achieve its target 2x net leverage early in 2H, allowing mgmt to nearly double FCF return by resuming share buybacks, a catalyst, in our view. ADI represents the industry’s leading HPA pure play offering three dominant analog franchises (ADI/LLTC/HITT) under one roof. This combination is driving significant long-term value, as evidenced by ADI’s 70%/40%/40% GM/OM/ FCF margin profile. We reiterate Outperform rating and $100 target.”

According to TipRanks.com, Schafer is a top 100 analyst with an average return of 16.7% and a 70.7% success rate. Schafer covers the Consumer Goods sector, focusing on stocks such as NXP Semiconductors, Skyworks Solutions, and Texas Instruments.

Currently, the analyst consensus on Analog Devices is Strong Buy and the average price target is $107.82, representing a 12.7% upside.

In a report issued on May 21, B.Riley FBR also maintained a Buy rating on the stock with a $122 price target.

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The company has a one-year high of $98.38 and a one-year low of $76.07. Currently, Analog Devices has an average volume of 2.49M.

Based on the recent corporate insider activity of 99 insiders, corporate insider sentiment is negative on the stock. Most recently, in March 2018, Eileen Wynne, the VP & CAO of ADI sold 5,209 shares for a total of $494,126.

TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.

Analog Devices, Inc. engages in the design, manufacture, and market of analog, mixed-signal, and digital signal processing integrated circuits used in virtually all types of electronic equipment. Its products include data converters; amplifiers and linear products; radio frequency integrated circuits; power management products; sensors based on microelectro mechanical systems technology; and other sensors and processing products, including digital signal processing and other processors. The company was founded by Raymond P. Stata and Matthew Lorber in 1965 and is headquartered in Norwood, MA.

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