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


Oppenheimer analyst Rick Schafer maintained a Buy rating on Analog Devices (ADI) today and set a price target of $117. The company’s shares opened today at $105.10, close to its 52-week high of $108.28.

Schafer said:

“ADI reported F1Q (Jan.) earnings Wednesday morning. Sales/EPS of $1.54B/$1.33 edged consensus $1.51B/$1.30E. F2Q (Apr.) $1.50B/$1.30 outlook was in line with the Street $1.52B/$1.30E. F2Q sales, down 4% Y/Y when adjusted for switch to sell-in accounting, compare favorably with HPA peers (e.g., TXN sales expected down 8% in 1Q). Comms led, reflecting 4G massive-MIMO upgrades and initial 5G deployments. Mgmt sees 4G upgrades driving 4x improvement in potential content. True 5G is expected to provide another content boost beginning in 2021. ADI’s elite GM retreated 70bps Y/Y on mix and lower utilization. Near term, we expect group fundamentals to remain pressured by semi cycle correction and macro uncertainty. Long-term, we like ADI’s rich industrial/auto/comm-heavy mix and leading 70%/40%/40% GM/OM/FCF margin profile. We maintain Outperform and raise target to $117 (from $100).”

According to TipRanks.com, Schafer is a top 100 analyst with an average return of 15.1% and a 70.3% success rate. Schafer covers the Consumer Goods sector, focusing on stocks such as Akoustis Technologies, Skyworks Solutions, and Texas Instruments.

The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Analog Devices with a $105.55 average price target, which is a 0.4% upside from current levels. In a report issued on February 11, Merrill Lynch also upgraded the stock to Buy with a $125 price target.

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Based on Analog Devices’ latest earnings release for the quarter ending October 31, the company reported a quarterly net profit of $431 million. In comparison, last year the company had a net profit of $267 million.

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.

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