Is Analog Devices a Winner for Your Portfolio?

With shares of Analog Devices (NYSE:ADI) trading at around $45.79, is ADI an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Investors weren’t pleased with Q1 results, which is understandable. Q1 GAAP EPS came in at $0.42 and revenue came in at $622.1 million. Both were moderate declines on a year-over-year basis. EPS was in line with expectations, but revenue came in at the low end of guidance, which was $612 million to $653 million. There were declines in the following segments: Industrial, Consumer, and Automotive. There was an improvement in the Communications segment. The strength in this segment is expected to continue due to the anticipation of increased demand for 4G and LTE.

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Analog Devices expects strong growth in Q2 due to improving order rates. EPS is expected to come in between $0.49 and $0.55. It should also be noted that RBC Capital raised its price target to $46 due to restocking and improved capex spending throughout the industry.

Analog Devices announced a 13 percent increase in its regular quarterly dividend, which is a positive sign.

Let’s take a look at some more important numbers prior to forming an opinion on the stock…