BNP Paribas Spots Major Upside in Analog Devices, Inc. (ADI) Ahead of Earnings

Analog Devices, Inc. (NASDAQ:ADI) is among the most profitable semiconductor stocks to buy. On Tuesday, November 4, BNP Paribas analyst David O’Connor initiated coverage on Analog Devices, Inc. (NASDAQ:ADI) with an ‘Outperform’ rating and a price target of $200.

This positive outlook, implying a potential upside of around 33%, comes ahead of the company’s fiscal fourth-quarter results, scheduled for November 25. The analyst, after studying the company’s highly differentiated product solutions, determined that the products deliver high performance and longevity, all while serving a very fragmented customer base of around 125,000 clients. O’Connor highlights that the company’s “blended ASP of 4x the analog average (40c)” aids Analog Devices, Inc. (NASDAQ:ADI) in driving a top-class gross margin.

Digging deeper, O’Connor noted that despite analog and industrial cycle remaining a “headwind,” there exist signs that part of the chip market is beginning to turn the corner.

“End customers remain cautious on macro/tariff concerns and are managing WCR into year-end,” O’Connor stated. “That said, we are at the trough, inventories are lean and orders are improving slowly, but need a catalyst to jumpstart the upcycle.”

In terms of share price performance, the stock has been on an upward trajectory, gaining around 9% year-to-date. But, it has underperformed the broader market as the NASDAQ Index is up around 21% so far.

Analog Devices, Inc. (NASDAQ:ADI) is a Massachusetts-based company specializing in integrated circuits (ICs), software, and subsystems products. Incorporated in 1965, the company is committed to accelerating human breakthroughs.

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