RBC Capital Lifts PT on Analog Devices (ADI) Following Q1 Results
RBC Capital lifted its price target on Analog Devices (NASDAQ: ADI) from $39 to $46 following Q1 results, but maintained a Sector Perform rating.
The firm note operational execution (gross margins, OpEx) more than offsets softer than expected revenue.
"We are encouraged that ADI continues to maintain a model that can deliver downside protection to EPS through strong operational controls. While we are encouraged that its Industrial market (45% of sales) is poised to benefit from restocking and increasing capital spending in the AprQ, we maintain our view that it is too early to measure the magnitude and speed of the recovery in the current cycle. We believe ADI’s premium p/e multiple of 17.6x CY14 consensus vs. our coverage group at 15.0x and SOX at 12.5x currently captures the implied gross margin upside as a result of utilization expanding from the high-50% level (expected for AprQ)."
For an analyst ratings summary and ratings history on Analog Devices click here. For more ratings news on Analog Devices click here.
Shares of Analog Devices closed at $47.01 yesterday, with a 52 week range of $34.25-$47.04.
The firm note operational execution (gross margins, OpEx) more than offsets softer than expected revenue.
"We are encouraged that ADI continues to maintain a model that can deliver downside protection to EPS through strong operational controls. While we are encouraged that its Industrial market (45% of sales) is poised to benefit from restocking and increasing capital spending in the AprQ, we maintain our view that it is too early to measure the magnitude and speed of the recovery in the current cycle. We believe ADI’s premium p/e multiple of 17.6x CY14 consensus vs. our coverage group at 15.0x and SOX at 12.5x currently captures the implied gross margin upside as a result of utilization expanding from the high-50% level (expected for AprQ)."
For an analyst ratings summary and ratings history on Analog Devices click here. For more ratings news on Analog Devices click here.
Shares of Analog Devices closed at $47.01 yesterday, with a 52 week range of $34.25-$47.04.