Sterne Agee Maintains Buy, $42 Target on Analog Devices

Sterne Agee remains Buy-rated with a $42 target price on Analog Devices (NYSE: ADI) soft guide that is likely conservative due to recovery in auto and industrial position.

Sterne Agee says, "ADI posted a soft quarter and guide impacted by the Thailand floods and cautious customers, but orders across key Auto-Industrial verticals trending in the right direction, improving q/q. ADI says 1) JanQ should represent a trough in sales and margins with utilization of 67%; 2) Key Distributor Inventory lowest since 2010; 3) Sees strong new and Replacement Automotive demand from China-Japan-U.S. and its Industrial customers more Optimistic – all driving improving F13E Utilization-GMs."

ADI closed at $39.82 a share yesterday.

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