SunTrust Is Buying Apple Supplier Analog Devices

Loading...
Loading...

SunTrust analyst William Stein and his team reiterated a Buy rating and $61.00 price target on shares of Analog Devices, Inc. ADI on Wednesday, following earnings. The experts cited two central investment considerations, -- which they expect to resolve constructively over the medium term:

  • 1) Whether the company will stabilize its sales at top customer Apple Inc. AAPL.
  • 2) Whether it will continue to transition to a financially levered company.

Regarding the first issue, the report pointed out that companies like Analog Devices, which “pursue the challenge of revenue growth with short-cycle and volatile consumer end markets like handsets can retain growth and smooth volatility through end market, customer, and product diversification, and aggressive pursuit of new content.” While they acknowledge they do not have any direct knowledge of the company’s pipeline of design activity, they highlighted an example of new design activity: a dual-lens camera driver.

Related Link: 10 Things Steve Jobs Was Wrong About

The firm estimates sales to Apple will surge sequentially in the April quarter and will continue to grow, year-over-year, in January of 2017.

In relation to the leverage issue, Stein and his team assured they expect the company to “eventually transition to a financially levered position, significantly benefiting equity,” continuing with the trend seen so far.

 

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Loading...
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorLong IdeasPrice TargetReiterationAnalyst RatingsTechTrading IdeasSunTrustWilliam Stein
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...