CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We keep our 12-month target at $193 on a P/E of 22x our CY 25 view of $8.69, above its five-year historical forward average of 20.5x given near bottoming fundamentals. We cut our FY 24 (Oct.) EPS to $6.39 from $7.80 and FY 25’s to $8.13 from $9.66. ADI posted Jan-Q EPS of $1.73 vs. $2.75, beating the $1.71 consensus. Sales fell 23%, better than feared, on declines across industrial (-31%), communications (-37%), and consumer (-22%), while automotive remains resilient (+9%). Although Apr-Q revenue/EPS guide is below expectations, we do expect it to mark the cyclical trough, barring macro pressures that could hit autos. Both gross (69% vs. 73.6%) and operating (42% vs. 51.1%) margins have compressed considerably on lower volume, but we like emphasis on shortening lead times, which should offer greater EPS leverage when the next cycle resumes in the 2H. ADI hikes its dividend by 7% (implies 1.9% yield). ADI’s content growth story in autos/industrials and recent customer inventory digestion offers upside ahead.