UPDATE: Credit Suisse Reiterates Outperform Rating, Raises PT on Analog Devices on Raised Estimates
In a report published Wednesday, Credit Suisse reiterated its Outperform rating on Analog Devices (NASDAQ: ADI), and raised its price target from $48.00 to $50.00.
Credit Suisse noted, “ADI reported JanQ rev below CS/Street but EPS in-line on better GM and lower OpEx. Slight JanQ rev miss was in-line with the Analog peer group and somewhat inconsequential relative to management's commentary that JanQ was a bottom. For AprQ, ADI guided rev up 4% to 8% q/q, slightly above our previewed absolute estimate of $657.7m, and better GM and OpEx drove EPS in-line. We continue to rate ADI Outperform based on (1) noticeably stronger order patterns in January, pushing the book-to-bill ratio above 1, (2) a 13% increase in dividend to $0.34 from $0.30, (3) expectations for Analog multiple expansion and (4) our view that ADI is an inexpensive way to play the cyclical recovery in Industrial, Auto and Infrastructure (I/A/I) - I/A/I is ~80% of ADI's revenue. The stock currently trades at 15.8x our CY13 EPS estimate (ex-cash), a 10% discount to other Semi names with significant I/A/I exposure - we expect ADI to trade at least in-line with the peer group target multiple and raise our TP to $50 from $48.”
Analog Devices closed on Tuesday at $47.01.
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