How Analysts View Analog Devices After Earnings

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When Analog Devices Inc. (NASDAQ: ADI) reported its fiscal first-quarter financial results on Wednesday, it posted solid earnings that beat expectations. It also noted that its acquisition of Linear Technology should close shortly. These results were heralded by investors and analysts alike.

24/7 Wall St. has included some of the key highlights from the earnings report, as well as what a few analysts said after the fact. In previous reports analysts noted that the relationship with Apple and the inherent volatility remains a risk, but Linear Technology will increase exposure to accelerating core auto, industrial and commercial markets.

The company said that it had $0.94 in earnings per share (EPS) and $984.4 million in revenue, versus consensus estimates that called for $0.73 in EPS and revenue of $871.9 million. In the same period of last year, Analog Devices posted EPS of $0.56 and $769.43 million in revenue.

In terms of the outlook for the fiscal second quarter, the company expects to see EPS in the range of $0.74 to $0.86 and revenues between $870 million and $950 million. The consensus estimates are $0.79 in EPS and $908.23 million in revenue for the current quarter.

Analog Devices plans to close its acquisition of Linear Technology by the end of the fiscal second quarter. Management believes that the combination will create an analog industry powerhouse, capable of creating tremendous value for our customers, employees and shareholders.

Vincent Roche, president and CEO of Analog Devices, commented:

Looking ahead to the April quarter, we are planning for revenue to be in the range of $870 million to $950 million, with sequential aggregate strength in our Business to Business (B2B) markets of industrial, automotive, and communications infrastructure being offset by seasonal patterns in the portable consumer market. At the mid-point of this range, we expect revenue to grow 17% over the prior year, which would represent the 4th consecutive quarter of year-over-year revenue growth for ADI.

A few analysts weighed in on Analog Devices after the earnings came out:

  • B. Riley raised the price target to $89 from $87.
  • BMO has an Outperform rating and raised the price target to $96 from $85.
  • Goldman Sachs has a Neutral rating and raised its target from $72 to $82.
  • Jefferies has a Buy rating and raised its price target to $94 from $84.
  • Keybanc raised the price target to $95 from $84.
  • Morgan Stanley raised the price target to $91 from $85.
  • Stifel has a Buy rating and raised the price target to $90 from $86.
  • SunTrust Robinson raised its price target from $93 to $99.
  • UBS raised the price target to $81 from $68.50.
  • Wells Fargo downgraded it to Market Perform from Outperform.

Shares of Analog Devices closed Friday at $82.48, with a consensus analyst price target of $86.72 and a 52-week trading range of $50.10 to $82.57. Over the course of the week the stock gained about 7.8%.