Analog Devices (ADI) delivered better-than-expected fiscal Q3 results for the period ended July 31, 2021. The global semiconductor company reported record revenues and earnings, and also confirmed a dividend offering.
Revenue in the quarter was up 21% compared to the same quarter last year to $1.76 billion, reaching a new all-time high and surpassing consensus estimates of $1.71 billion. The increase was backed by the record performances of the company’s industrial and automotive segments. (See Analog devices stock charts on TipRanks)
In other positive news, adjusted earnings increased 26% year-over-year to $1.72 a share, surpassing the consensus estimate of $1.62 a share. During the quarter, Analog Devices returned over $400 million to shareholders through share repurchases and dividends.
According to Analog CEO Vincent Roche, robust bookings across all end-markets complemented by lean inventories and capacity additions should allow Analog Devices to end the year on a high note.
Roche stated, “The economic recovery continues to take shape with demand still far exceeding supply, underscoring the importance of semiconductors across all industries.”
For the fiscal Q4, Analog Devices expects revenue of $1.78 billion (+/- $70 million). Additionally, projected adjusted EPS stands at $1.72 (+/- $0.11).
Markedly, the board of directors has approved a quarterly cash dividend of $0.69 per share to be paid on September 8, 2021, to shareholders of record as of August 27, 2021.
Yesterday, Oppenheimer analyst Rick Schafer reiterated a Buy rating on the stock with a $200 price target, implying 20.64% upside potential to current levels.
According to Schafer, Q3 results showed “broad” demand reflecting the book-to-bill ratio of over 1.2 times. However, the company’s supply/demand gap is widening, with the backlog extending to 2022 despite the company expanding its capacity.
Consensus among analysts is a Strong Buy based on 11 Buys and 2 Holds. The average Analog Devices price target of $185.17 implies 11.70% upside potential to current levels.
ADI scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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