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Street Positive on Analog Devices Following Analyst Day -Breaking

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© Reuters. Analog Devices Street Positive (ADI) After Analyst Day

The shares of Analog Devices After the 2022 Analyst Day, (NASDAQ) was closed yesterday at 2.75%.

However, street analysts remain positive about the stock. Prashanth Mahendra Rahh, the company’s chief financial officer, stated that revenues are tracking ahead of what was expected as sales growth continues at an impressive pace.

Mahendra Rajah stated to investors that Analog anticipates long-term sales growth between 7%, 10% and high single-digits.

According to the company, it expects $15 in adjusted earnings per share by 2027 and a 40% cash flow free margin of 40 percent.

As we pursue our long-term goal to create and empower an intelligent edge through digital technology and software, there is a great opportunity before us, stated Vincent Roche, Chief Executive Officer, Chair, ADI.

Tore, Stifel’s analyst, stated that he reiterated the Buy rating as well as a Top Large-Cap Select designation following the event. These were his three main takeaways after the meeting:

1) ADI’s emphasis on high-end analog/mixed signal IC markets is a major differentiator. It drives high margins/FCFs through delivering high system-level value. 2) ADI has doubled down its hybrid manufacturing model and leveraging foundry IP in order to boost mfg. efficiencies while maximizing flexibility, resulting in high and stable profit margins; and 3) New long-term financial targets that rank among the best across semiconductors and the S&P 500, Svanberg wrote in a report.

Vivek Arjaya, a Bank of America BAC analyst said that ADI has the best position to keep delivering top-of-the-line FCF growth and generation.

Arya stated that ADI delivered line of sight to $15 per year of EPS power in 2027e. That’s almost 2x the accretion over 5 years. EBIT margins were 42-50% vs 46% for FY22e. Sales growth was 7-10%. These figures are unmatched among analog peers.

By Senad Karaahmetovic

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