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Should Analog Device's Warning Spook Apple Investors?

Should Analog Device's Warning Spook Apple Investors?

JPMorgan on Friday highlighted Analog Devices, Inc. (NASDAQ: ADI) after the company announced it expects first quarter revenue to be about 9 percent below its previous forecast. Analysts Rod Hall, Harlan Sur, and Ashwin Kesireddy gave their opinion on this news and how it affects Apple Inc. (NASDAQ: AAPL).

Analysts noted that Analog Devices said the lower outlook is the result of weaker-than-forecasted customer demand in the company's portable consumer business unit, which began in December, and is expected to continue into FQ2.

Related Link: What Are Suppliers Saying About Apple's Q4 Demand?

Regarding the impact of weakness of Analog Devices on Apple, Hall wrote, "We believe ADI's consumer business is substantially exposed to Apple, and note that the drumbeat of bad news from Apple suppliers keeps building...While we see macro-driven weakness in Apple earnings report as more likely than not we also believe that post-earnings weakness would represent a unique buying opportunity for one of the highest quality tech companies in the US market."

In December, JPMorgan lowered its expectations for Apple due to early order cut indications and weaker overall macro data. Going forward, weakness in Apple has the possibility to impact a large number of companies, which could create new buying opportunities.

Shares of Analog Devices recently traded at $48.24, down 4.48 percent.

Latest Ratings for AAPL

Feb 2020Canaccord GenuityMaintainsBuy
Feb 2020BarclaysMaintainsEqual-Weight
Jan 2020B of A SecuritiesUpgradesHoldBuy

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Posted-In: Ashwin Kesireddy Harlan Sur JPMorgan Rod HallAnalyst Color Analyst Ratings Tech Best of Benzinga


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