Barclays Upgrades Analog Devices to Overweight

Barclays analyst Tom O’Malley upgraded Analog Devices (NASDAQ: ADI) from Equalweight to Overweight with a price target of $375.00 (from $315.00).

“• High Industrial Exposure and Correlation with PMI.

ADI has the highest Industrial exposure within the Analog group by far and a strong correlation between its Y/Y sales growth and PMIs, which makes this a quality name to own as PMIs recover.

The one metric to address is the stock’s historical performance when PMIs turn above 50 (see Figures 6, 7).

We think the landscape of less attractive assets in the space will make ADI more desirable this cycle. • Best-in-Class Margin Profile with Pricing Increases.

ADI has an attractive margin profile (~70% GM, 40-45% OpM) that is industry leading and a much better inventory position than peers (~130 days on a GAAP basis vs. ~180 at peers). • Data Center Contributes Materially to Growth.

We estimate LDD-MT% upside vs. Street in ADI’s Comms business when assuming growth in-line with cloud capex over CY26-27 for 2/3 of its Comms revenue (Data Center) and GDP growth for the other third.

We revise our Comms. estimates to up +43% and +15% in CY26/27 respectively.”

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