Analog Devices Posts Q4 Beat, Analysts Say Industry Shows Early Signs Of Cyclical Recovery

Shares of Analog Devices Inc (NASDAQ:ADI) were rising in early trading on Thursday, after the company reported upbeat fiscal first-quarter results.

Here are some key analyst takeaways.

• Oppenheimer analyst Rick Schafer maintained an Outperform rating, while raising the price target from $245 to $270.
• JPMorgan analyst Harlan Sur reiterated an Overweight rating, while lifting the price target from $280 to $300.
• Benchmark analyst David Williams reaffirmed a Buy rating, while raising the price target from $245 to $275.
• Needham analyst Quinn Bolton maintained a Hold rating on the stock.

Check out other analyst stock ratings.

Oppenheimer: Analog Devices reported its fiscal first-quarter sales 3% above consensus and earnings 6% higher, Schafer said in a note. While Industrial led the outperformance, all verticals improved during the quarter, he added.

The company's sales and earnings growth guidance for the fiscal second quarter at 2% and 1%, respectively, beating than consensus, the analyst stated. "ADI a prime beneficiary of cyclical rebound in core auto/industrial," he further wrote.

JPMorgan: Analog Devices delivered revenues, earnings and operating margins better that the midpoint of the guidance range, Sur said. Management's April quarter outlook was strong, he added.

The company announced a dividend hike of 8% as well as an authorization for another $10 billion in share repurchases, "reflecting the continued gradual improvement of the business," the analyst stated. "Signs are emerging that we are at a cyclical inflection point," he further wrote.

Benchmark: Analog Devices reported revenues of $2.43 billion, beating consensus of $2.36 billion, while earnings of $1.63 per share came in higher than expectations of $1.54 per share, Williams said. The outperformance was driven by better gross and operating margins "on the improved revenue leverage," he added.

The broad market indicates the onset of a cyclical recovery, "boosting confidence to begin shipping to end demand," the analyst stated. "China continues to be the primary growth driver in automotive and partially drove the better-than-expected results," he further wrote.

Needham: Management indicated that inventory levels had normalized across "channels, geographies, and end markets," Bolton said. The company is expected to begin shipping in-line with consumption in the fiscal second quarter, he added.

The company is likely to generate revenue growth of 9% in fiscal 2025, the analyst stated. Management projected "strength in both key end markets of Industrial and Automotive," he further wrote.

Price Action: Shares of Analog Devices had risen by 0.93% to $243.91 at the time of publication on Thursday.

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