Chipmaker Analog Devices will reinstate its share repurchase program from Nov. 9 after suspending it in March amid challenging market conditions due to the pandemic, as per a disclosure made in an SEC filing. Shares rose 2.4% on Nov. 6 in reaction to the news.
Analog Devices (ADI) had also continued the suspension of the repurchase program due to its proposed acquisition of Maxim Integrated Products as well as persistent uncertainty due to the pandemic. However, the company continued its dividend payments amid the crisis. Analog devices has a dividend yield of 1.86%.
Meanwhile, at the time of the suspension of the repurchase program, the company had repurchased a total of 156.1 million shares of its common stock for about $6.3 billion. The company now has $1.9 billion repurchase limit remaining under the existing plan. (See ADI stock analysis on TipRanks)
Last month, shareholders of Analog Devices as well as of Maxim (MXIM) approved the merger deal. The company believes that the combination will strengthen its position as an analog semiconductor leader with increased breadth and scale across multiple end markets. It expects the deal to be completed in the summer of 2021.
In September, Stifel analyst Christopher O’Cull reiterated a Buy rating for Analog Devices with a price target of $142 after the company announced the industry’s first wireless battery management system for electric vehicles. The company also disclosed that a Tier-1 OEM (original equipment manufacturer) customer is set to ramp up initial production in CY21/CY22, and more materially in CY22/CY23. The analyst believes wireless battery management systems will replace conventional wired connection architecture making this a meaningful product announcement.
Analog Devices is scheduled to announce its fiscal fourth quarter results on Nov. 24. The Street is very bullish about Analog Devices with a Strong Buy analyst consensus based on 12 unanimous Buys. The $141.45 average analyst price target indicates an upside potential of about 6% in the months ahead. Shares have advanced 12.3% so far this year.