UBS has adjusted its price target for Analog Devices (ADI, Financial), reducing it from $300 to $295. Despite this revision, the investment firm maintains its Buy rating on the stock, reflecting continued optimism about its potential performance. This update highlights UBS's confidence in Analog Devices' ability to navigate current market conditions effectively, even with a slightly lower price target.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 27 analysts, the average target price for Analog Devices Inc (ADI, Financial) is $236.57 with a high estimate of $300.00 and a low estimate of $155.00. The average target implies an upside of 14.00% from the current price of $207.51. More detailed estimate data can be found on the Analog Devices Inc (ADI) Forecast page.
Based on the consensus recommendation from 33 brokerage firms, Analog Devices Inc's (ADI, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Analog Devices Inc (ADI, Financial) in one year is $178.93, suggesting a downside of 13.77% from the current price of $207.51. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Analog Devices Inc (ADI) Summary page.
ADI Key Business Developments
Release Date: February 19, 2025
- Revenue: $2.42 billion, a 1% sequential decrease and a 4% decline year-over-year.
- Industrial Revenue: 44% of total revenue, up 1% sequentially.
- Automotive Revenue: 30% of total revenue, up 2% sequentially.
- Communications Revenue: 12% of total revenue, up 6% sequentially.
- Consumer Revenue: 13% of total revenue, down 15% sequentially.
- Gross Margin: 68.8%, up 90 basis points sequentially.
- Operating Margin: 40.5%.
- Adjusted EPS: $1.63.
- Cash and Short-term Investments: $2.7 billion.
- Net Leverage Ratio: 1.1.
- Inventory: Increased by $27 million sequentially; Days of inventory at 176.
- Operating Cash Flow (TTM): $3.8 billion.
- CapEx (TTM): $656 million.
- Free Cash Flow (TTM): $3.2 billion or 34% of revenue.
- Dividend Increase: 8% increase to $0.99 per share.
- Share Repurchase Authorization: Additional $10 billion authorized, totaling $11.5 billion available.
- Q2 Revenue Guidance: $2.5 billion, plus or minus $100 million.
- Q2 Adjusted EPS Guidance: $1.68, plus or minus $0.10.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Analog Devices Inc (ADI, Financial) reported first quarter revenue, profitability, and earnings per share above the midpoint of their outlook.
- The company increased its dividend for the 21st consecutive year, highlighting a strong capital return program.
- ADI is well-positioned for sustained recovery in the semiconductor cycle, with normalized inventory levels and improved customer engagements.
- The company anticipates double-digit growth in several sectors, including industrial automation, surgical robotics, and automotive.
- ADI's hybrid manufacturing model and strategic investments have enhanced their ability to meet dynamic customer needs and support growth.
Negative Points
- Despite positive results, ADI continues to operate in a challenging macro and geopolitical environment.
- The company experienced a 4% year-over-year revenue decline in the first quarter, adjusting for an extra week in fiscal Q1 2024.
- Consumer revenue was down 15% sequentially, reflecting seasonal latency.
- Wireless revenue continues to face demand challenges, impacting the communications segment.
- The macroeconomic environment remains uncertain, which could influence the pace of ADI's recovery and growth.
