Shares of Analog Devices ADI climbed more than 10%, touching $64.94, before closing at $64.81, following an upgrade from Equal Weight to Overweight by Barclays' analyst Blayne Curtis. In addition, the analyst increased the price target to $70.00 from $55.00.
Per a recent deal win, Analog Devices’ high accuracy converter chip will be used by Apple AAPL for the upcoming iPhone and iPads which will enable the 3D Touch feature. The 3D/Force Touch technology allows users to modulate the pressure when they touch the screen. This touch feature uses tiny electrodes around the display to differentiate between a light tap and a deep press.
Curtis expects iPhone 6S (expected to be released this year) to have the 3D touch feature, followed by iPads in 2016. According to him, this new design win could be accretive to Analog Devices’ earnings by 80 cents in 2016, extending benefits in 2017 as well.
Moreover, the analyst remains optimistic about the benefits received from the Hittite Microwave LLC merger. The acquisition complements Analog Devices’ commitment to offer high frequency chips and other signal processors, increasing its cost synergies and revenues, going forward.
Additionally, Curtis believes that Analog Devices remains well positioned in the growing industrial and automotive markets. The company’s new products will continue to see very strong deployment in the emerging automotive market, further expanding its share in the sensor market.
Analog Devices is a leading supplier of analog and digital signal processing (DSP) integrated circuits. Its large customer base provides a distinct competitive edge. We believe that the company’s supremacy is driven by its innovations in new design technology and huge product portfolio.
Currently, Analog Devices has a Zacks Rank #2 (Buy). Other well-ranked stocks in the same sector are Microchip Technology Inc. MCHP and NXP Semiconductors NV NXPI, sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment