Analog Devices Outlook - Weak Technicals and Mixed Fundamentals Pose Caution

Market Snapshot

Outlook: Bearish on technicals — Analog Devices (ADI) shows a weak technical profile with bearish indicators dominating and a recent price drop of -0.18%.

News Highlights

• McKinsey weighs in on tariffs and chip supply chains — A recent analysis by McKinsey explores how U.S. tariffs might impact the semiconductor sector, which could indirectly affect Analog Devices as a key player in the industry. This news could increase regulatory uncertainty.
• US Semiconductors ETF SOXX Faces $750M Net Outflow — The ETF tracking U.S. semiconductor stocks lost $750 million in May 2025. While Analog Devices isn’t directly tied to the ETF, such outflows may reflect investor caution across the broader semiconductor space.
• Japan seeks to strengthen cooperation with the U.S. on rare earths and semiconductors — This could lead to policy shifts that indirectly influence supply chains and market dynamics, which may help companies like Analog Devices in the long run if trade relations improve.

Analyst Views & Fundamentals

Average analyst rating: 3.60
Performance-weighted rating: 3.02
Rating consistency: Dispersed — Analysts are split, with 1 "Strong Buy", 4 "Buy", and 5 "Neutral" ratings, suggesting no clear consensus on ADI’s direction.

These ratings contrast with the recent price trend, which has seen a decline of -0.18%. This mismatch highlights a possible lack of alignment between market expectations and current performance.

Key Fundamental Values and Model Scores

• EV/EBIT: 136.02 — This ratio reflects a high valuation relative to earnings and carries an internal diagnostic score of 0.03.
• Net cash flow from operating activities per share (YoY growth rate): -93.20% — A steep decline in cash flow per share, with a score of 0.02.
• Net profit attributable to parent company shareholders / Net profit: 100% — Indicates no non-controlling interests, with a score of 0.02.
• Interest coverage ratio (EBIT / Interest expense): 11.13% — Suggests strong ability to meet interest obligations, with a score of 0.03.
• Net cash flow from operating activities (YoY growth rate): -0.02% — A slight drop in operating cash flow, with a score of 0.02.
• Diluted earnings per share (YoY growth rate): 26.14% — A modest increase in EPS, with a score of 0.02.

Money-Flow Trends

Big-money and institutional investors are showing positive flow, with block_inflow_ratio at 0.58 and an extra-large_inflow_ratio at 0.59. In contrast, retail flows (small investors) remain negative, with a small_trend at -0.49 and a small_inflow_ratio of 0.49.

While institutional sentiment is cautiously optimistic, the retail market remains bearish. This divergence suggests uncertainty among small investors but some confidence from larger players.

Key Technical Signals

The technical outlook for ADI is weak, with 5 bearish indicators and 1 bullish indicator. A technical score of 2.22 (on a 0–10 scale) underscores this bearish trend.

Recent Chart Patterns

• Bearish Engulfing (09/10/2025) — A classic bearish reversal pattern, though it only has a moderate internal diagnostic score of 7.29.
• MACD Death Cross (09/05/2025) — A strong bearish signal with a score of 1.01.
• RSI Overbought (08/27/2025) — Suggests overvaluation, with a score of 1.00.
• WR Overbought (08/28/2025) — Also points to potential pullbacks, with a score of 2.00.
• Ex-Dividend Date & Dividend Record Date (09/02/2025) — These dates often coincide with minor price drops, each scoring 1.00.

Trend Quality

Key Insight: Bearish signals dominate — With 5 bearish indicators vs. 1 bullish, the chart pattern is clearly leaning downward. This suggests a potential for further declines in the near term.

Conclusion

Actionable takeaway: Consider waiting for a pull-back — While institutional flows are positive and fundamentals show mixed signals, the technicals are clearly bearish. With over 5 bearish indicators and a technical score of 2.22, it may be wise to avoid ADI for now and wait for more favorable chart conditions.