Sterne Agee CRT Reiterates Buy on Analog Devices (ADI) Following a 3Q Beat
Sterne Agee CRT reiterated a Buy rating on Analog Devices (NASDAQ: ADI), and raised the price target to $71.00 (from $68.00), following the company's 4Q earnings report. ADI reported an upside in revenue by $69M and EPS by $0.20 versus consensus expectations. These large beats were driven by ~$50M in contribution from Consumer (Apple) and ~20M q/q growth in comm infrastructure.
Analyst Douglas Freedman commented, "Despite increased volatility with larger Apple ($118.86, Buy, Cihra) exposure, we continue to like ADI on increased adoption of its Consumer products, recovery and new opportunities in comm infrastructure, shareholder friendly cash allocation strategy, and strong earnings leverage. We currently expect a 11% earnings growth on a 8% top-line growth for F2017 in our revised model. We are raising our price target to $71 from $68, or 16x our F17 FCF estimate of $3.85 plus net cash estimate of $9.41 per share."
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Shares of Analog Devices closed at $56.80 yesterday.