Oppenheimer Believes Analog Devices (ADI) Won’t Stop Here


In a report released today, Rick Schafer from Oppenheimer maintained a Buy rating on Analog Devices (ADI), with a price target of $100. The company’s shares closed yesterday at $104.49, close to its 52-week high of $105.09.

Schafer commented:

“ADI reports January-quarter earnings Wednesday (2/20). We expect F1Q sales/ EPS roughly in line with consensus $1.51B/$1.28E, but see a negative bias to the F2Q (Apr.) outlook vs Street $1.52B/$1.30E as macro uncertainty continues to pressure demand. We reduced ADI and group estimates on 1/7 to reflect near-term headwinds. On the November earnings call, mgmt highlighted seeing slowdowns in factory automation and test equipment in China as a result of the ongoing trade war. We see 5G infrastructure as a likely positive offset to slower industrial/auto. Near term, we expect group fundamentals could remain pressured by the challenged macro and current semi cycle correction. Long term, we like ADI’s rich industrial/auto/comm- heavy mix and leading 70%/40%/40% GM/OM/FCF margin profile. We maintain our Outperform.”

According to TipRanks.com, Schafer is a top 100 analyst with an average return of 15.0% and a 69.6% success rate. Schafer covers the Consumer Goods sector, focusing on stocks such as Akoustis Technologies, Skyworks Solutions, and Texas Instruments.

Currently, the analyst consensus on Analog Devices is a Moderate Buy with an average price target of $103.08, representing a -1.3% downside. In a report issued on February 11, Merrill Lynch also upgraded the stock to Buy with a $125 price target.

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Analog Devices’ market cap is currently $38.68B and has a P/E ratio of 26.32. The company has a Price to Book ratio of 3.52.

Based on the recent corporate insider activity of 77 insiders, corporate insider sentiment is negative on the stock.

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Analog Devices, Inc. engages in the design, development, manufacture, and marketing of integrated circuits (ICs). Its products include industrial process control systems, medical imaging equipment, factory process automation systems, patient vital signs monitoring devices, instrumentation and measurement systems, wireless infrastructure equipment, energy management systems, networking equipment, aerospace and defense electronics, optical systems, automobiles, and portable consumer devices. The company was founded by Raymond P. Stata and Matthew Lorber in 1965 and is headquartered in Norwood, MA.