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Investing.com - Cantor Fitzgerald has maintained its Overweight rating and $270.00 price target on Analog Devices (NASDAQ:ADI), highlighting the company’s strong gross margin performance. The semiconductor giant, currently valued at $118 billion and trading near its 52-week high of $247.10, has shown robust momentum with a 13% gain over the past six months. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.
The research firm noted that Analog Devices’ gross margins bottomed in the first quarter of 2024, earlier than the broader semiconductor group, which is expected to hit bottom in the first half of 2025.
Cantor Fitzgerald pointed out that Analog Devices’ gross margins have already recovered to nearly 70% levels, demonstrating the premium that the company’s products command in the market.
While the firm acknowledged that further gross margin expansion for Analog Devices is somewhat limited compared to peers due to already high levels, it sees "clear upside" to consensus gross margin estimates through calendar year 2026.
Cantor Fitzgerald projects that Analog Devices’ gross margins will likely track toward 72% or higher as revenues grow, viewing the company’s gross margin story as a reminder of its "best-in-class status" in the semiconductor industry.
In other recent news, Analog Devices has received an upgrade from Cantor Fitzgerald, which raised its stock rating from Neutral to Overweight and increased its price target to $270. This decision highlights Analog Devices’ strong position in the analog semiconductor market, particularly its significant exposure to the industrial sector, which is expected to benefit from an industry upcycle. Additionally, Analog Devices’ latest senior notes offering received favorable credit ratings from Moody’s, Fitch, and S&P, with ratings of A2, ’A’, and ’A-’, respectively. These ratings reflect the company’s strong financial profile and operational resilience, alongside its strategic focus on the automotive and industrial segments.
Stifel analysts have maintained a Buy rating for Analog Devices, citing robust growth in its automotive business, which has outperformed the broader market. The company expects stable automotive revenue in the upcoming quarter, driven by trends such as Electrification and Advanced Driver Assistance Systems. Furthermore, Analog Devices has announced the formation of the OpenGMSL Association, which aims to standardize in-vehicle connectivity using its Gigabit Multimedia Serial Link technology. This initiative is expected to accelerate innovation in autonomous driving and infotainment applications.
Overall, these developments underscore Analog Devices’ strategic positioning and operational strength in the semiconductor industry.
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