Morgan Stanley Maintains a Buy Rating on Analog Devices (ADI), Cuts PT

In a report released on May 23, Joseph Moore from Morgan Stanley maintained a Buy rating on Analog Devices Inc. (NASDAQ:ADI) and lowered its price target to $212 from $214.

The bullish outlook followed the company's strong fiscal Q2 2025 results on May 22, with revenue and EPS growth surpassing expectations. The company underwent a 22% year-over-year growth in revenue to $2.64 billion, while EPS rose 32% year-over-year to $1.85 in the quarter.

The analyst reasoned that Q2's better-than-expected results provided an optimistic outlook for the next quarter, supported by the solid performance of all the company's regions and end markets. He also noted the Industrial segment's strong performance - which made up 44% of the total revenue and rose 17% year-over-year - since it had been underperforming in terms of shipments for the last two years. Moore expects the segment to align supply with demand in Q3 and drive a notable improvement.

The expected outperformance of the Industrial segment is a key factor for the analyst as it is the most profitable segment for Analog Devices Inc. (NASDAQ:ADI). It makes a significant contribution to the overall revenue, and its trajectory of improvement and high margins expectation, when coupled with the company's overall optimistic operations, support a favorable outlook for Analog Devices Inc. (NASDAQ:ADI).

Analog Devices Inc. (NASDAQ:ADI) is a semiconductor company that combines digital, analog, and software technologies into engineering solutions. Its products include digital signal processing and system, analog and mixed signals, power management and reference, amplifiers radio frequency, and more.

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