Analog devices today
Analog devices
(As of 11/29/2024 ET)
- 52 week range
- $179.63
▼
$244.14
- Dividend yield
- 1.69%
- P/E ratio
- 66.28
- Target price
- $249.33
Analog devices NASDAQ: ADI the fourth quarter of 2024 did not have a good quarter. However, its results and forecasts are in line with industry forecasts, which represent a return to growth after several years of inventory correction. The correction was driven by pandemic-era costs and supply chain bottlenecks, causing many OEMs to ramp up orders to combat the problems. Today’s story is that inventory levels have normalized, demand for industrial semiconductor products is growing in all end markets, and Analog Devices is well positioned to benefit from a promising multi-year semiconductor growth cycle.
Analog Devices is cautiously optimistic about 2025
Analog Devices’ revenue declined in the fourth quarter and in fiscal 2024, but trends are positive and point to growth in 2025. Fourth-quarter revenue of $2.44 billion fell 10% year-over-year but beat consensus estimates, with the decline slowing from the prior year. to previous quarters. The company reports sequential growth across all semiconductor end markets, particularly in the automotive industry. By segment, the industrial sector was the weakest, down 21% year-on-year, followed by an 18% decline in communications and a slight contraction of 2% in the automotive sector. The consumer group was the only strength in the fourth quarter, rising 31% to account for 11% of net income.
The margin news was mixed in with lower gross margins and offset by improvements in SG&A expenses. The end result is that GAAP margins were relatively stable compared to last year, while adjusted earnings fell 360 basis points, but less than expected. Adjusted earnings of $1.67 were down more than 15%, but they were nearly 200 basis points better than expected and strengthened by guidance.
The forecasts are equally mixed, but consistent with growth forecast for 2025, with the first-quarter contraction narrowing another 400 basis points and the full-year outlook firm. The company is cautiously optimistic that 2025 will be a year of strong growth, according to CFO Richard Puccio. Analysts forecast revenue to grow 10%, with net income driven by leverage.
Quality of operation helps support the upward trend of analog devices
Analog Devices Dividend Payment
- Dividend yield
- 1.69%
- Annual dividends
- $3.68
- Record dividend increase
- 22 years old
- Annual dividend growth for 3 years
- 11.52%
- Dividend payout ratio
- 111.85%
- Next dividend payment
- December 20
ADI Dividend History
Quality of work is one of the factors supporting the upward trend in Analog Devices stock prices. Highlights from the third quarter included improved cash flow and free cash flow despite margin compression, a nearly doubling of the cash position and stable shareholder equity. Cash flow and balance sheet support healthy returns on capital and rising returns on capital, including dividends and share repurchases.
The dividend yield of 1.6% exceeds the market average, and the stock is trading near record levels and is expected to rise annually. With 20 years of consistent growth in its credit, the company is on track to be included in the Dividend Aristocrat Index before the end of the decade. The buybacks are robust, compensating for blur and reducing the amount by about 1.4% in F2024.
Analog Devices analysts will shift gears in 2024
An important takeaway from analyst data on ADI for 2024 is that the sentiment trend changed from negative to positive mid-year, driving this market higher. The consensus estimate is $252, well above the current high, and the revision trend suggests an even higher price level is likely. Latest estimates have the stock trading in the $285 range, adding another 15% to the consensus target.
Following the release, the technical data for ADI shares looks bullish. The market is up more than 5% in premarket trading and is near all-time highs. The critical resistance point is near $240 and may soon be broken. In this scenario, the market could easily rise to the $252 level and move into the upper range of analysts. Technical targets implied by the move to new highs include a $40 rise from the critical resistance point.
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