RBC Capital Cuts Price Target on Analog Devices (ADI) Following Negative Pre-Announcement
RBC Capital maintained an Outperform rating on Analog Devices (NASDAQ: ADI), and cut the price target to $58.00 (from $69.00), following the company's negatively pre-announced earnings results. ADI noted that the negative pre-announcement was isolated to the consumer end market and that the industrial, auto, and comm businesses are in line with expectations.
Analyst Amit Daryanani commented, "This evening after the close, ADI negatively preannounced Jan-qtr results due to lower than expected demand in ADI's portable consumer business unit (AAPL). Positively, the company noted that the negative pre-announcement was isolated to the consumer end market and that the industrial, auto, and comm businesses are in line with expectations. Management indicated that the consumer business unit weakness first began in December, which is in line with recent data points from the AAPL iPhone supply chain; therefore, we are not surprised by the company's negative announcement today. While ADI will likely have to contend with AAPL concentration dynamics, we see stronger growth in Automotive and Industrial as being potential offsets to this. We maintain our Outperform rating but lower our price target to $58 from $69."
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Shares of Analog Devices closed at $50.50 yesterday.