UBS Maintains Buy Rating for Analog Devices, Lowers PT to $280

UBS Maintains Buy Rating for Analog Devices, Lowers PT to $280

Analog Devices (ADI) has seen a slight adjustment in its price target by UBS, with the investment bank lowering its target from $285 to $280 while maintaining a Buy rating on the stock. This move comes amidst a broader positive sentiment surrounding the semiconductor sector, particularly in the wake of recent earnings reports and industry performance.

UBS analyst Michael Briest reiterated his Buy rating on ADI, with the target price unchanged at $250. This indicates a level of confidence in the company's financial health and growth prospects. The stock has been performing well, with recent gains of 10.17% in the past month, leading the Computer and Technology sector's gain of 7.61% and the S&P 500's gain of 5.13%.

Analog Devices closed the recent trading session at $245.15, demonstrating a +1.87% change from the preceding day's closing price. The company's earnings per share (EPS) are projected to be $1.92, reflecting a 21.52% increase from the same quarter last year. The Zacks Consensus Estimate for revenue is projecting net sales of $2.76 billion, up 19.18% from the year-ago period. Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $7.39 per share and revenue of $10.6 billion, marking changes of +15.83% and +12.49%, respectively, from last year.

Despite the positive outlook, ADI is currently trading with a Forward P/E ratio of 32.57, indicating a discount compared to its industry's Forward P/E of 39.67. The PEG ratio of 2.22 further suggests that the stock's expected earnings growth rate is in line with its industry peers.

Investors should keep an eye on any recent revisions to analyst forecasts for ADI. Positive estimate revisions can serve as a sign of optimism about the business outlook, as reflected in the Zacks Rank system. ADI is currently holding a Zacks Rank of #3 (Hold), which indicates a neutral outlook.

Overall, the adjustments made by UBS reflect a balanced view on ADI's performance and future prospects. The stock remains attractive to investors seeking exposure to the semiconductor sector, particularly with the strong earnings and revenue projections.

References:
[1] https://www.tipranks.com/news/the-fly/analog-devices-price-target-lowered-to-280-from-285-at-ubs-thefly
[2] https://www.marketscreener.com/quote/stock/ORACLE-CORPORATION-13620698/news/ORACLE-CORP-UBS-reiterates-its-Buy-rating-50447250/
[3] https://nz.finance.yahoo.com/quote/ADI/chart/
[4] https://finance.yahoo.com/news/analog-devices-adi-exceeds-market-220003977.html