Dj Analog Devices Inc. Stock Underperforms Wednesday When Compared To Competitors

The S&P 500 Index Wednesday closed up +0.02%, the Dow Jones Industrials Index closed up +0.11%, and the Nasdaq 100 Index closed down -0.16%.

Stocks on Wednesday settled mixed. The overall market found support from the as-expected US October consumer price report. The benign inflation report boosted the chances of a 25 bp rate cut by the Fed next month to 82% from 62% before the report. Stocks also found support on dovish comments from Minneapolis Fed President Kashkari, who said inflation is headed in the right direction. However, the Nasdaq 100 Index closed lower due to weakness in chip stocks.

Stocks also gained in comments from other Fed members who supported gradual rate cuts. Dallas Fed President Logan said, "I anticipate the FOMC will most likely need more rate cuts to finish the journey," but policymakers should "proceed cautiously" given uncertainties about how restrictive monetary policy currently is. Also, St. Louis Fed President Musalem said, "Monetary policy is well positioned to return inflation to target and support maximum employment through gradual adjustments of the policy rate toward a neutral level over time, provided inflation continues to fall toward 2%."

US Oct CPI rose +0.3% m/m and +2.6% y/y, right on expectations. Oct CPI ex-food and energy remained unchanged from Sep at +3.3% y/y, right on expectations.

US MBA mortgage applications rose +0.5% in the week ended November 8, with the purchase mortgage sub-index up +1.9% and the refinancing sub-index down -1.5%. The average 30-year fixed rate mortgage rose +5 bp to 6.86% from 6.81% in the prior week.

Stocks have rallied sharply over the past week, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting new record highs on speculation President-elect Trump will boost corporate profits through tax cuts and reduced regulation.

The markets are looking ahead to Thursday’s comments from Fed Chair Powell, who will speak on the economic outlook at an event at the Dallas Fed. Also, Friday’s report on retail sales will be looked at to see if consumer spending is holding up. Oct retail sales are expected to be up +0.3% m/m, and Oct retail sales ex-autos are also expected to be up +0.3% m/m. In addition, the Q3 earnings season is wrapping up, with more than 50 companies scheduled to report quarterly results this week.

Of the 85% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.4% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 82% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets Wednesday settled mixed. The Euro Stoxx 50 fell to a 3-month low and closed down -0.09%. China's Shanghai Composite Index closed up +0.51%. Japan's Nikkei Stock 225 fell to a 1-week low and closed down -1.66%.

Interest Rates

December 10-year T-notes (ZNZ24) Wednesday were unchanged. The 10-year T-note yield rose +2.3 bp to 4.451%. T-notes Wednesday gave up an early advance on the as-expected US Oct CPI report. Despite the benign inflation report, T-notes gave up their gains as the Oct core CPI of +3.3% y/y is still well above the Fed’s 2% target. Also, anticipation that President-elect Trump’s pro-growth policies could quicken inflation weighed on T-note prices.

On Wednesday, T-notes initially moved moderately higher after today’s US October consumer price report was right on expectations, easing inflation concerns. The benign CPI report boosted the chances of a 25 bp rate cut by the Fed next month to 82% from 62% before the report. Also, dovish comments from Minneapolis Fed President Kashkari gave T-note a boost when he said that inflation is headed in the right direction.

European government bond yields Wednesday moved higher. The 10-year German bund yield rose +2.8 bp to 2.390%. The 10-year UK gilt yield rose +2.1 bp to 4.520%.

ECB Governing Council member and Bundesbank President Nagel said core inflation is still quite high, and there are still noticeable price pressures, especially in services. He added that President-elect Trump's tariff plans could cost Germany 1% of GDP and could cause economic contraction.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 23% for a -50 bp rate cut at the same meeting.

US Stock Movers

Albemarle closed up more than +5% after RBC Capital Markets raised its price target on the stock to$133 from $108.

Charter Communications closed up more than +3% after agreeing to buy Liberty Broadband in an all-stock transaction.

Cummins closed up more than +3% after Evercore ISI upgraded the stock to outperform from in line with a price target of $408.

Rivian Automotive closed up more than +13% after Volkswagen AG raised its investment plans in the company by $800 million.

Spotify Technology closed up more than +11% after forecasting Q4 monthly active users of 665 million, stronger than the consensus of 660.73 million.

Rockwell Automation closed up more than +3% after BNP Paribas Exane initiated coverage on the stock with a recommendation of outperform with a price target of $345.

Pfizer closed up more than +2% after CFRA upgraded the stock to buy from hold with a price target of $30.

Emerson Electric closed up more than +1% after BNP Paribas Exane initiated coverage on the stock with a recommendation of outperform with a price target of $155.

Chip stocks are under pressure today to weigh on the overall market. Micron Technology closed down more than -4%. Also, ARM Holdings Plc , Analog Devices , KLA Corp , Advanced Micro Devices , and Texas Instruments closed down more than -3%. In addition, ON Semiconductor , Lam Research , Applied Materials , and Marvell Technology closed down more than -2%.

Super Micro Computer closed down more than -6% to lead losers in the Nasdaq 100 after saying it cannot file its quarterly report on form 10-Q for the period ended September as it needs time to find a new auditor.

Skyworks Solutions closed down more than -4% after forecasting Q1 revenue of $1.05 billion-$1.08 billion, weaker than the consensus of $1.09 billion.

Groupon closed down more than -26% after reporting Q3 revenue of $114.5 million, below the consensus of $118 million, and forecast full-year revenue of $486 million-$493 million, weaker than the consensus of $507.3 million.

Maplebear Inc closed down more than -10% after forecasting Q4 adjusted Ebitda of $230 million-$240 million, below the consensus of $244.4 million.

Rocket Cos closed down more than -8% after forecasting Q4 adjusted net revenue of $1.05 billion-$1.20 billion, well below the consensus of $1.32 billion.

Caterpillar closed down more than -1% after Evercore ISI downgraded the stock to underperform from in line with a price target of $365.

Earnings Reports (11/14/2024)

Advance Auto Parts Inc (AAP), Applied Materials Inc (AMAT), Globant SA (GLOB), Post Holdings Inc (POST), Walt Disney Co/The (DIS).

• Will the S&P 500 Put Cash in Your Christmas Stocking or a Lump of Coal?
• What Were Markets Doing the Monday Morning After?
• CPI, Earnings and Other Can't Miss Items This Week
• Up 181% in 6 Months, Can Upstart Stock Keep Rising?

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

The S&P 500 Index today is up +0.04%, the Dow Jones Industrials Index is up +0.27%, and the Nasdaq 100 Index is down -0.32%.

Stock index futures today are mixed. The broader market initially moved higher today after US October consumer prices rose as expected. Stocks also found support, and T-note yields fell on dovish comments from Minneapolis Fed President Kashkari, who said inflation is headed in the right direction and he doesn't think inflation is stuck above the Fed's 2% target.

However, the weakness in chip stocks is limiting gains in the overall market. Also, hawkish comments from Dallas Fed President Logan weighed in stocks when she said, "I anticipate the FOMC will most likely need more rate cuts to finish the journey," but policymakers should "proceed cautiously" given uncertainties about how restrictive monetary policy currently is.

US Oct CPI rose +0.3% m/m and +2.6% y/y, right on expectations. Oct CPI ex-food and energy remained unchanged from Sep at +3.3% y/y, right on expectations.

US MBA mortgage applications rose +0.5% in the week ended November 8, with the purchase mortgage sub-index up +1.9% and the refinancing sub-index down -1.5%. The average 30-year fixed rate mortgage rose +5 bp to 6.86% from 6.81% in the prior week.

Stocks have rallied sharply over the past week, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting new record highs on speculation President-elect Trump will boost corporate profits through tax cuts and reduced regulation.

The markets are looking ahead to Friday’s report on retail sales, which will be looked at to see if consumer spending is holding up. Oct retail sales are expected to be up +0.3% m/m, and Oct retail sales ex-autos are also expected to be up +0.3% m/m. Also, the Q3 earnings season is wrapping up, with more than 50 companies scheduled to report quarterly results this week.

Of the 85% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.4% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 82% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 fell to a 3-month low and is down -0.71%. China's Shanghai Composite Index closed up +0.51%. Japan's Nikkei Stock 225 fell to a 1-week low and closed down -1.66%.

Interest Rates

December 10-year T-notes (ZNZ24) today are up by +6 ticks. The 10-year T-note yield is down -0.8 bp to 4.420%. T-notes are moving moderately higher after today’s US October consumer price report was right on expectations, easing inflation concerns. The benign CPI report boosted the chances of a 25 bp rate cut by the Fed next month to 82% from 62% before the report. Also, dovish comments from Minneapolis Fed President Kashkari gave T-note a boost when he said that inflation is headed in the right direction. T-notes fell back from their best levels after European government bond yields rose and after Dallas Fed President Logan said policymakers should "proceed cautiously" on further rate cuts.

European government bond yields today are moving higher. The 10-year German bund yield is up +2.0 bp to 2.382%. The 10-year UK gilt yield is up +1.9 bp to 4.518%.

ECB Governing Council member and Bundesbank President Nagel said core inflation is still quite high, and there are still noticeable price pressures, especially in services. He added that President-elect Trump's tariff plans could cost Germany 1% of GDP and could cause economic contraction.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 23% for a -50 bp rate cut at the same meeting.

US Stock Movers

Albemarle is up more than +6% to lead gainers in the S&P 500 after RBC Capital Markets raised its price target on the stock to$133 from $108.

Charter Communications is up more than +4% after agreeing to buy Liberty Broadband in an all-stock transaction.

Cava Group is up more than +10% after reporting Q3 restaurant comparable sales rose +18.1%, stronger than expectations of +12.4%, and raised its full-year restaurant comparable sales to +12%-13% from a previous forecast of +8.5%-9.5%, well above the consensus of +9.95%.

Rivian Automotive is up more than +21% after Volkswagen AG raised its investment plans in the company by $800 million.

Spotify Technology is up more than +9% after forecasting Q4 monthly active users of 665 million, stronger than the consensus of 660.73 million.

Pure Storage is up more than +4% after Oppenheimer & Co initiated coverage on the stock with a recommendation of outperform with a price target of $70.

Rockwell Automation is up more than +3% after BNP Paribas Exane initiated coverage on the stock with a recommendation of outperform with a price target of $345.

Emerson Electric is up more than +1% after BNP Paribas Exane initiated coverage on the stock with a recommendation of outperform with a price target of $155.

Chip stocks are under pressure today to weigh on the overall market. ARM Holdings Plc and KLA Corp are down more than -3%. Also, Micron Technology , ON Semiconductor , and Lam Research are down more than -2%. In addition, Advanced Micro Devices , Texas Instruments , Applied Materials , Analog Devices , Marvell Technology , Microchip Technology , and Qualcomm are down more than -1%.

Super Micro Computer is down more than -4% to lead losers in the S&P 500 and Nasdaq 100 after saying it is unable to file its quarterly report on form 10-Q for the period ended September as it needs time to find a new auditor.

Skyworks Solutions is down more than -4% after forecasting Q1 revenue of $1.05 billion-$1.08 billion, weaker than the consensus of $1.09 billion.

Groupon is down more than -23% after reporting Q3 revenue of $114.5 million, below the consensus of $118 million, and forecast full-year revenue of $486 million-$493 million, weaker than the consensus of $507.3 million.

Maplebear Inc is down more than -12% after forecasting Q4 adjusted Ebitda of $230 million-$240 million, below the consensus of $244.4 million.

Rocket Cos is down more than -10% after forecasting Q4 adjusted net revenue of $1.05 billion-$1.20 billion, well below the consensus of $1.32 billion.

Caterpillar is down more than -1% to lead losers in the Dow Jones Industrials after Evercore ISI downgraded the stock to underperform from in line with a price target of $365.

Tesla is down more than -1% after Phillip Securities downgraded the stock to sell from reduce with a price target of $230.

Earnings Reports (11/13/2024)

Cisco Systems Inc (CSCO), Loar Holdings Inc (LOAR), NU Holdings Ltd/Cayman Islands (NU), Tetra Tech Inc (TTEK).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

The S&P 500 Index today is up +0.08%, the Dow Jones Industrials Index is up +0.18%, and the Nasdaq 100 Index is down -0.08%.

Stock index futures recovered from overnight losses and are mixed. The broader market is climbing on a relief rally after US October consumer prices rose as expected. Stocks also found support, and T-note yields fell further on dovish comments from Minneapolis Fed President Kashkari, who said inflation is headed in the right direction and he doesn't think inflation is stuck above the Fed's 2% target. Weakness in chip stocks is weighing on the Nasdaq 100.

US Oct CPI rose +0.3% m/m and +2.6% y/y, right on expectations. Oct CPI ex-food and energy remained unchanged from Sep at +3.3% y/y, right on expectations.

US MBA mortgage applications rose +0.5% in the week ended November 8, with the purchase mortgage sub-index up +1.9% and the refinancing sub-index down -1.5%. The average 30-year fixed rate mortgage rose +5 bp to 6.86% from 6.81% in the prior week.

Stocks have rallied sharply over the past week, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting new record highs on speculation President-elect Trump will boost corporate profits through tax cuts and reduced regulation.

The markets are looking ahead to Friday’s report on retail sales that will be looked at to see if consumer spending is holding up. Oct retail sales are expected to be up +0.3% m/m, and Oct retail sales ex-autos are also expected to be up +0.3% m/m. Also, the Q3 earnings season is wrapping up, with more than 50 companies scheduled to report quarterly results this week.

Of the 85% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.4% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 82% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 fell to a 3-month low and is down -0.43%. China's Shanghai Composite Index closed up +0.51%. Japan's Nikkei Stock 225 fell to a 1-week low and closed down -1.66%.

Interest Rates

December 10-year T-notes (ZNZ24) today are up by +11 ticks. The 10-year T-note yield is down -2.8 bp to 4.440%. T-notes are moving moderately higher after today’s US October consumer price report was right on expectations, easing inflation concerns. The benign CPI report boosted the chances of a 25 bp rate cut by the Fed next month to 82% from 62% before the report. Also, dovish comments from Minneapolis Fed President Kashkari gave T-note a boost when he said that inflation is headed in the right direction.

European government bond yields today are mixed. The 10-year German bund yield is up +0.3 bp to 2.365%. The 10-year UK gilt yield is down -2.7 bp to 4.472%.

ECB Governing Council member and Bundesbank President Nagel said core inflation is still quite high, and there are still noticeable price pressures, especially in services. He added that President-elect Trump's tariff plans could cost Germany 1% of GDP and could cause economic contraction.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 23% for a -50 bp rate cut at the same meeting.

US Stock Movers

Albemarle is up more than +7% after RBC Capital Markets raised its price target on the stock to$133 from $108.

Charter Communications is up more than +3% after agreeing to buy Liberty Broadband in an all-stock transaction.

Tesla is up more than +4% to lead gainers in the Nasdaq 100 on speculation the company will benefit from President-elect Trump’s policies and after Trump picked Tesla CEO Musk to lead the new Department of Government Efficiency.

Cava Group is up more than +15% after reporting Q3 restaurant comparable sales rose +18.1%, stronger than expectations of +12.4%, and raised its full-year restaurant comparable sales to +12%-13% from a previous forecast of +8.5%-9.5%, well above the consensus of +9.95%.

Rivian Automotive is up more than +22% after Volkswagen AG raised its investment plans in the company by $800 million.

Spotify Technology is up more than +9% after forecasting Q4 monthly active users of 665 million, stronger than the consensus of 660.73 million.

Pure Storage is up more than +4% after Oppenheimer & Co initiated coverage on the stock with a recommendation of outperform with a price target of $70.

Emerson Electric is up more than +1% after BNP Paribas Exane initiated coverage on the stock with a recommendation of outperform with a price target of $155.

Maplebear Inc is down more than -10% after forecasting Q4 adjusted Ebitda of $230 million-$240 million, below the consensus of $244.4 million.

Skyworks Solutions is down more than -4% to lead losers in the S&P 500 after forecasting Q1 revenue of $1.05 billion-$1.08 billion, weaker than the consensus of $1.09 billion.

Chip stocks are under pressure today to weigh on the overall market. KLA Corp is down more than -2% to lead losers in the Nasdaq 100. Also, ON Semiconductor , Lam Research , Texas Instruments , Micron Technology , Applied Materials , Analog Devices , and Qualcomm are down more than -1%.

Super Micro Computer is down more than -2% after saying it is unable to file its quarterly report on form 10-Q for the period ended September as it needs time to find a new auditor.

Groupon is down more than -28% after reporting Q3 revenue of $114.5 million, below the consensus of $118 million, and forecast full-year revenue of $486 million-$493 million, weaker than the consensus of $507.3 million.

Rocket Cos is down more than -12% after forecasting Q4 adjusted net revenue of $1.05 billion-$1.20 billion, well below the consensus of $1.32 billion.

Caterpillar is down more than -1% to lead losers in the Dow Jones Industrials after Evercore ISI downgraded the stock to underperform from in line with a price target of $365.

International Paper is down more than -1% after BNP Paribas Exane downgraded the stock to underperform from neutral with a price target of $48.20.

Earnings Reports (11/13/2024)

Cisco Systems Inc (CSCO), Loar Holdings Inc (LOAR), NU Holdings Ltd/Cayman Islands (NU), Tetra Tech Inc (TTEK).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

The most recent trading session ended with Analog Devices (ADI) standing at $219.55, reflecting a -0.42% shift from the previouse trading day's closing. This change lagged the S&P 500's 0.29% loss on the day. Elsewhere, the Dow lost 0.86%, while the tech-heavy Nasdaq lost 0.09%.

Shares of the semiconductor maker have depreciated by 6.75% over the course of the past month, underperforming the Computer and Technology sector's gain of 3.2% and the S&P 500's gain of 3.3%.

The investment community will be paying close attention to the earnings performance of Analog Devices in its upcoming release. The company is slated to reveal its earnings on November 26, 2024. It is anticipated that the company will report an EPS of $1.63, marking a 18.91% fall compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.4 billion, down 11.58% from the year-ago period.

It's also important for investors to be aware of any recent modifications to analyst estimates for Analog Devices. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Analog Devices presently features a Zacks Rank of #4 (Sell).

With respect to valuation, Analog Devices is currently being traded at a Forward P/E ratio of 29.37. This represents a discount compared to its industry's average Forward P/E of 41.41.

Investors should also note that ADI has a PEG ratio of 3.09 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor - Analog and Mixed industry currently had an average PEG ratio of 3.43 as of yesterday's close.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 212, putting it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Zacks Investment Research

Analog Devices ADI shares have soared 29% over the past year, outperforming the Zacks Semiconductor - Analog and Mixed industry’s return of 24.7%. This outperformance reflects the benefits of its portfolio strength and strategic partnerships, which are driving its momentum across various end-markets like industrial, automotive, consumer and communications.

Analog Devices’ efforts to integrate artificial intelligence technology into products to deliver enhanced customer experience are a plus. Investments in technology and business innovation and increasing power design wins are other major positives, which are impacting the stock positively.

Analog Devices, Inc. Price and Consensus

Analog Devices, Inc. price-consensus-chart | Analog Devices, Inc. Quote

Strategic Collaborations to Boost ADI’s Prospects

ADI’s strategic partnership with India’s Tata Group to boost the latter’s electronic manufacturing ecosystem marks a significant achievement. Tata Electronics, Tata Motors and Tejas Networks signed a Memorandum of Understanding with ADI to use its products in Tata applications mostly in electric vehicles and network infrastructure.

Analog Devices partnered with Flagship Pioneering to facilitate a fully digitized biological world. This collaboration combines ADI's engineering expertise in analog and digital semiconductors with Flagship Pioneering's proficiency in applied biology to promote the discovery of biological insights, new and enhanced measurements, diagnostics and novel interventions.

ADI’s latest collaboration with Honeywell HON to digitize commercial spaces without replacing existing wiring, reducing costs and downtime is a notable development.

Analog Devices has also teamed up with Taiwan Semiconductor TSM to secure long-term wafer capacity via Japan Advanced Semiconductor Manufacturing. This partnership, while ensuring a stable chip supply and facilitating rapid scaling and increased output to meet customer needs can be beneficial for ADI.

Analog Devices and BMW Group’s announcement of early adoption of E²B, ADI's 10BASE-T1S Ethernet to the Edge bus technology within the automotive industry, is a noteworthy development. BMW will leverage ADI’s E²B for ambient lighting system design in its vehicles.

Analog Devices Suffers Persistent Headwinds

Despite having a diverse portfolio and strategic alliances, macroeconomic challenges still pose a risk. Geopolitical tensions and recessionary fears are major negatives.

Rising competition from industry players like Texas Instruments TXN, which is also making concerted efforts to integrate generative AI capabilities into its products, remains a major concern. Texas Instruments’ growing investments in new growth avenues, strong portfolio and advanced technology infusion are driving its prospects.

So far this year, Texas Instruments launched several products, including the DLPC8445 display controller — a new, compact solution for 4K UHD projectors. It enables ultra-small, high-performance projectors for gaming and AR glasses, delivering sub-millisecond latency and frame rates up to 240Hz.

ADI Offers Dim Q4 Guidance

For fourth-quarter 2024, ADI expects revenues to be $2.40 billion (+/- $100 million), suggesting an increase of 4% sequentially at the midpoint. The Zacks Consensus Estimate for the same is pegged at $2.40 billion, indicating a decline of 11.6% year over year.

ADI anticipates a non-GAAP operating margin of 41% (+/- 100 bps).

The company expects the Industrial and Consumer end markets to increase, Communications to be flat and Automotive to decrease at the midpoint on a sequential basis.

The company expects non-GAAP earnings to be $1.63 (+/- $0.10) per share. The consensus mark for the same is pegged at $1.63 per share, unchanged over the past 60 days, suggesting a year-over-year fall of 18.9%.

ADI’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 4.4%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Zacks Rank and Valuation

ADI shares currently have a stretched valuation, as suggested by a Value Score of D.

Analog Devices stock is trading with a forward 12-month Price/Sales of 10.61X compared with the industry’s 7.64X.

ADI currently carries a Zacks Rank #4 (Sell), implying investors should sell the stock.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment Research