ADI

Analog Devices Inc.

TMT, Industrial/Transportation


Presented:04/06/2020
Price:$95.80
Cap:$35.28B
Current Price:$225.87
Cap:$112.14B

Presented

Date04/06/2020
Price$95.80
Market Cap$35.28B
Ent Value$46.00B
P/E Ratio29.55x
Book Value$31.75
Div Yield2.34%
Shares O/S368.22M
Ave Daily Vol3,205,445
Short Int1.24%

Current

Price$225.87
Market Cap$112.14B
Analog Devices, Inc. engages in the design, development, manufacture, and marketing of integrated circuits (ICs). Its products include industrial process control systems, medical imaging equipment, factory process automation systems, patient vital signs monitoring devices, instrumentation and measurement systems, wireless infrastructure equipment, energy management systems, networking equipment, aerospace and defense electronics, optical systems, automobiles, and portable consumer devices. The company was founded by Raymond P. Stata and Matthew Lorber in 1965 and is headquartered in Norwood, MA.

Publicly traded companies mentioned herein: Analog Devices Inc (ADI), Apple Inc (AAPL), Maxim Integrated Products Inc (MXIM), Texas Instruments Inc (TXN), Xilinx Inc (XLNX)

Highlights

The presenter covers the semiconductor sector, and is long shares of Analog Devices Inc (ADI) due to its favorable mix of offensive and defensive characteristics. He expects growth from exposure to 5G infrastructure end markets, top line contributions from the Linear Technology business, and relatively healthy inventory levels. Defensively, the company has the highest gross margins in the sector and a differentiated industrial market mix that leans toward industries experiencing structural growth. He ascribes a 23x multiple to his 2021 earnings estimate of $5.75/share, implying 45% upside to his target of $130/share. This price target factors in a 10% decline in revenue this year, which is greater than the decrease the Street is currently forecasting. In his bearish scenario, he models earnings downside to 4.35 for 2021, and applies a trough multiple of 18x to yield downside to $75.

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Idea Discussion

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