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Analog Devices Earnings Preview: Best Quarter In Years?

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Analog Devices, Inc. (NASDAQ: ADI) rose 1 percent on Tuesday as the company prepares to announce its second quarter financial results after the market closes.

Management has guided for the best results in years, with earnings of $0.72 per share on revenue of $820 million. The Street is modeling in line earnings and slightly lower revenue of $818.64 million. The crowd projects earnings one cent above guidance and revenue of $822.82 million.

These estimates compare to earnings of $0.59 per share and revenue $694.54 million reported in the same quarter last year, and earnings of $0.63 per share on revenue of $771.99 million retrieved last quarter.

Analog Devices has managed to beat estimates and guidance in most of the latest quarters.

The chart above illustrates the evolution of consensus estimates over time. Expert and the crowd expectations have been rising as earnings got closer.

Full Year Forecasts

After the last earnings report, Deutsche Bank analysts raised their second quarter revenue estimate to $820 million (from $800 million), and EPS estimate to $0.72 from $0.69.

Related Link: Analog Devices Earnings: What Are Shares Worth Before The Release?

For the full year, the firm anticipates revenue of $3.35 billion and EPS of $3.05. For 2016, $3.54 billion in revenue and $3.35 in EPS.

They rate the stock a Hold and have a $60 price target.

In addition, Jefferies reiterated a Buy rating and boosted its price target from $60 to $68.

Their report explains, “With semis forecasted to under-ship their OEM customers in 1H15, we [the analysts] think semis are set up for upside surprises, as seen with ADI's outlook. We see a strong link between capital return and valuation, and continue to like ADI for its broad-based exposure, its target to return 80% of FCF to investors, and its op margin expansion potential.”

Jefferies now expects revenue of $3.32 billion and EPS of $2.83 for 2015, and revenues of $3.59 billion and EPS of $3.14 for 2016.

Latest Ratings for ADI

DateFirmActionFromTo
Nov 2016MKM PartnersMaintainsNeutral
Nov 2016KeyBancMaintainsOverweight
Nov 2016Deutsche BankMaintainsHold

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