Analog Devices (ADI) Stock Upgraded to Strong Buy by Morgan Stanley Analyst

By Don Francis, Editor
November 18, 2023 8:29 AM UTC
Analog Devices (ADI) Stock Upgraded to Strong Buy by Morgan Stanley Analyst

Morgan Stanley's Joseph Moore upgraded their rating on Analog Devices (NASDAQ: ADI) from Hold to Strong Buy on 2023/11/17. The analyst also raised their price target by 27.8% from $176 to $225.

In a note previewing Analog Devices' Q4 2023 earnings report, scheduled for release on 2023/11/21, Moore expressed optimism about the company's future prospects. According to the analyst, "a bottom is near in Analog/MCU, with past cycles suggesting that duration has stayed relatively consistent at 22 to 26 months." This suggests that Analog Devices may be poised for a turnaround in the near future.

Moore also highlighted that consensus estimate revisions have turned negative, indicating that the numbers have been de-risked. This, in turn, has led to Moore becoming more constructive on the Analog/MCU group, as visibility on a bottom has improved. While the analyst cautioned that Analog Devices' Q4 earnings report may be "mixed at best," there is potential for it to be the "last cut."

The positive outlook from Morgan Stanley's Joseph Moore is in line with the sentiment among other analysts. Currently, 82.4% of top-rated analysts rate ADI as a Strong Buy or Buy, while 17.6% see it as a Hold. Notably, no analysts recommend or strongly recommend selling the stock.

Looking ahead, the consensus forecast among analysts is that ADI's upcoming year will deliver earnings per share (EPS) of $9.61. If analysts' predictions are correct, this would represent a 29.7% increase on a year-over-year basis.

In terms of performance, ADI's stock has shown resilience, with an 11.5% increase year-over-year. However, during this period, ADI has trailed behind the broader market, as the S&P 500 has posted a gain of 14%.

Morgan Stanley's Joseph Moore has established a track record of success as an analyst. WallStreetZen ranks Moore in the top 5% out of 4,399 Wall Street analysts, with an impressive average return of 10.1% and a win rate of 56.8%. The analyst specializes in the Consumer Cyclical and Industrials sectors, among others.

Analog Devices, Inc. is a leading company in the design, manufacturing, testing, and marketing of integrated circuits (ICs), software, and subsystems. Leveraging analog, mixed-signal, and digital signal processing technologies, the company provides a range of products including data converters, power management and reference products, high-performance amplifiers, radio frequency and microwave ICs, and digital signal processing and system products.

With a strong presence in the automotive, communications, industrial, and high-end consumer markets, Analog Devices serves clients globally through various channels including direct sales, third-party distributors, and independent sales representatives.

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