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On Tuesday, Stifel analysts increased the price target for Analog Devices stock (NASDAQ:ADI) to $248 from the previous $225, while reaffirming their Buy rating on the shares. This aligns with broader analyst sentiment, as InvestingPro data shows 19 analysts have recently revised their earnings upwards, with price targets ranging from $155 to $300. The revision comes with an optimistic outlook on the company’s revenue, citing several factors that could contribute to a solid financial performance.
Stifel’s analysis suggests that Analog Devices’ revenue for the April quarter could align with their estimate of $2.50 billion, marking a 3.2% quarter-over-quarter increase. As a prominent player in the Semiconductors & Semiconductor Equipment industry, according to InvestingPro, the company maintains strong financial health with liquid assets exceeding short-term obligations. This projection is based on a robust Industrial sector potentially balancing out weaker Automotive results, expected quarter-over-quarter declines in Communications and Consumer segments, and observations from peers such as NXP Semiconductors (NASDAQ:NXPI), Microchip Technology (NASDAQ:MCHP), Monolithic Power Systems (NASDAQ:MPWR), and Texas Instruments (NASDAQ:TXN) that have either met or slightly exceeded expectations.
For the June quarter, Stifel anticipates that Analog Devices might guide its revenue midpoint in line with their estimate of $2.60 billion, reflecting a 4.0% quarter-over-quarter growth. This expectation is supported by industry trends including Microchip Technology’s book-to-bill ratio exceeding 1.0, signs of bottoming near-term demand in the Industrial and Automotive sectors as indicated by NXP Semiconductors and Texas Instruments, and a relatively minor direct impact from tariffs as reported by peers.
The positive forecast is further bolstered by Analog Devices’ earlier adjustments in the cycle approximately eight quarters ago, ongoing secular drivers in the Automotive and Industrial sectors, and an impressive trailing twelve-month free cash flow of $3.18 billion, which represents 34.1% of revenues. With a gross profit margin of 57.2% and a strong dividend history spanning 22 consecutive years of increases, the company demonstrates robust financial performance. InvestingPro analysis indicates the stock is currently trading near its Fair Value, with additional insights available in the comprehensive Pro Research Report, which offers deep-dive analysis of this and 1,400+ other US stocks. Stifel has adjusted the 12-month price target for Analog Devices to $248, which corresponds to 11.2 times the enterprise value to CY26 estimated sales, attributing this adjustment to higher recent comparables.
In other recent news, Analog Devices has been the focus of several significant developments. Stifel analysts have increased their price target for Analog Devices to $275, maintaining a Buy rating, due to the company’s strong performance in the high-performance analog and mixed-signal sector. This follows Citi’s update, which raised its price target to $260, citing robust bookings in the Industrial market. Investors are eagerly anticipating the company’s upcoming F2Q25 results, with expectations of surpassing consensus estimates. Meanwhile, Analog Devices shareholders have approved key proposals, including re-electing board members and ratifying Ernst & Young as the independent accounting firm for the fiscal year. Additionally, the shareholders voted to amend the company’s Articles of Organization to lower certain voting requirements, which may streamline future decision-making. However, the company faces potential challenges from China’s retaliatory tariffs on U.S. imports, which could impact its cost structures. Despite these headwinds, Analog Devices remains a top pick for analysts, reflecting confidence in its strategic position and growth potential.
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