In a report released yesterday, Harlan Sur from J.P. Morgan reiterated a Buy rating on Analog Devices, with a price target of $310.00.
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Harlan Sur has given his Buy rating due to a combination of factors that highlight Analog Devices’ strong performance and growth potential. The company has shown robust results in the July quarter, surpassing expectations in revenue, operating margins, and earnings per share, driven by a cyclical recovery and increased demand in the Chinese automotive sector. The positive trend is further supported by consistent order growth and a backlog increase, indicating a solid demand outlook.
Moreover, Analog Devices is benefiting from significant growth drivers across various sectors. The aerospace and defense segment is experiencing strong momentum, while the automated test equipment and optical networking sectors are seeing growth fueled by AI and data center demands. Despite a temporary dip in gross margins due to supply constraints, the margins are expected to improve. The company’s diversified portfolio and strategic initiatives, such as the Maxim acquisition, are anticipated to enhance margins and earnings leverage, supporting the Buy rating and a price target increase to $310 by December 2026.
In another report released today, KeyBanc also maintained a Buy rating on the stock with a $310.00 price target.