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.

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…