Promising Outlook for Analog Devices: Strong Growth Expected Despite Challenges

Joshua Buchalter, an analyst from TD Cowen, maintained the Buy rating on Analog Devices. The associated price target is $285.00.

Joshua Buchalter has given his Buy rating due to a combination of factors that highlight Analog Devices’ promising outlook. The company has demonstrated a solid performance with a beat and raise, coupled with an optimistic tone looking into fiscal year 2026. Despite a slight miss in industrial results, the strength across the portfolio, particularly in AI datacenter and ATE, remains robust. The expectation for growth across all segments in FY26, albeit with low visibility, further supports the positive outlook.
Buchalter also points out that Analog Devices is benefiting from improved channel inventory management and increasing exposure to unique growth drivers in AI, automotive, and industrial sectors. The company is now shipping to meet end demand with normalized inventory levels. Despite the challenges of tough comparisons and short lead times, the company is expected to maintain significant growth. Additionally, while the gross margin percentage was slightly below expectations due to a lower industrial mix, it is anticipated to rise through 2026. Overall, despite a premium valuation, Analog Devices is seen as a strong player in a market facing uncertain demand and geopolitical volatility.

In another report released yesterday, Stifel Nicolaus also reiterated a Buy rating on the stock with a $290.00 price target.

Based on the recent corporate insider activity of 83 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ADI in relation to earlier this year.