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Headquartered in Wilmington, Massachusetts, Analog Devices, Inc. (ADI) is a global semiconductor company with a market cap of $106.85 billion. ADI specializes in designing, manufacturing, and marketing a wide range of analog, mixed-signal, and digital signal processing (DSP) integrated circuits. The company's products serve critical roles in sectors such as automotive, industrial, healthcare, and communications, offering solutions that enhance electronic systems' performance, accuracy, and efficiency.
ADI shares have underperformed the broader market over the last year. ADI has gained 23.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 24.9%. Also, in 2024, the stock is up 12.7%, compared to SPX's 16.2% rise on a YTD basis.
Zooming in further, ADI has significantly underperformed the VanEck Semiconductor ETF (SMH) on a YTD basis. The exchange-traded fund has gained 40.9% over this period.
On Aug. 1, shares of Analog Devices fell over 5% as part of a broader semiconductor sell-off sparked by Lam Research's weaker-than-expected Q1 earnings forecast. ADI reported Q2 earnings on May 22. Revenue and earnings for the period were $2.16 billion and $1.40, exceeding analysts' forecasts of $2.10 million and $1.26. The stock gained 10.9% on the day of the earnings release.
For the current fiscal year, ending in December, analysts expect ADI's EPS to decline 38.2% year over year to $6.24 on a diluted basis. The company's earnings surprise history is mixed. It beat or matched the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 26 analysts covering ADI stock, the consensus rating is a “Strong Buy.” That’s based on 18 “Strong Buy” ratings, one “Moderate Buy,” and seven “Holds.”
On Aug. 6, Morgan Stanley (MS) analyst Joseph Moore maintained a “Buy” rating on Analog Devices, with a price target of $250, implying a potential upside of 11.8% from current levels.
The mean price target of $258.17 represents a 15.4% premium to ADI’s current price levels. The Street-high price target of $295 suggests an upside potential of 31.9%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
