Zacks Investment Research downgraded shares of Analog Devices Inc. (ADI) from NEUTRAL to UNDERPERFORM on January 10, 2014, with a target price of $45.00.
Analog Devices is a leading supplier of analog and DSP integrated circuits. The fourth quarter earnings were above the Zacks Consensus Estimate due to strong automotive revenue growth coupled with better gross margins. However, forward guidance was weak due to customer shutdowns and inventory reductions due to holidays in December and January period. Though ADI is solidly positioned in secular growth markets and its products continue to see strong deployment in the emerging automotive market, the softening demand for semiconductors at the end of 2013 and weaker projections for the upcoming quarter, indicate near-term uncertainty. We are therefore downgrading Analog Devices shares from Neutral to Underperform.
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