Analog Devices’ Fiscal Q2 Revenue Outlook ‘In-Line With Broad-Based Peers,’ Morgan Stanley Says

Analog Devices’ (ADI) forecast for a 16% quarter-over-quarter drop in fiscal Q2 revenue “was slightly worse than expected but in-line with broad-based peers,” Morgan Stanley said in a note Wednesday.

The company said Wednesday that it expected fiscal Q2 revenue of $2.10 billion at the midpoint, which Morgan Stanley said is lower than its estimate of $2.39 billion and the Street’s $2.36 billion.

“We see reasons to be encouraged across inventory management, margin resilience, and booking improvements,” the firm said.

Analog Devices appears to be “better positioned” than peers in the coming quarters, the firm said, adding that the company remains its “preferred name” within the analog space.

“At this stage of the cycle we have a preference towards names with higher [average selling price], a lower internal manufacturing footprint, and less automotive exposure,” Morgan Stanley said.

Morgan Stanley maintained the overweight rating on Analog Devices stock and cut the price target to $212 from $219.

Analog Devices shares were down 1.5% in recent Thursday trading.

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