Analog Devices target raised to $224 by Jefferies on demand optimism

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Analog Devices target raised to $224 by Jefferies on demand optimism
Credit: © Reuters.

On Wednesday, Jefferies, a well-known financial services company, increased its price target for Analog Devices (NASDAQ: ADI ) shares, moving the target from $212.00 to $224.00. The firm maintained a Buy rating on the stock, expressing confidence in the company's future performance.

The revision follows Analog Devices' recent financial results, which showed a modest revenue beat of 0.6% and earnings per share surpassing expectations by $0.03, a 2% increase. However, the company's revenue and earnings per share outlook for the upcoming quarter, at the midpoint, were 11% and 19% below the consensus, respectively.

Analog Devices has observed a sequential improvement in bookings, which are nearing parity, and anticipates that the headwinds from inventory corrections will diminish in the April 2024 quarter. The company expects a 20% quarter-over-quarter decline in Industrial revenues for the same period.

Jefferies highlighted several factors that could lead to potential upside surprises, including normalized lead times and limited visibility, which are often indicative of better-than-expected demand recovery. Based on these observations and the anticipation of improving demand, Jefferies decided to raise the price target for Analog Devices.

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