Analog Devices Announces ASR Agreements, Updates Q4 Outlook

Analog Devices (ADI) announced on Tuesday that it has entered accelerated shares repurchase (ASR) agreements of up to $2.5 billion of the company’s common stock. It also provided revised guidance for the fourth quarter of Fiscal Year 2021.

Analog Devices designs, develops, manufactures, and markets integrated circuits (ICs) that leverage analog, mixed-signal, and digital signal processing technologies.

ASR Agreements

The company seeks to complete the ASR agreements under its current share repurchase authorization, which has about $10 billion remaining in the authorization. Also, repurchases under the ASR agreements will be funded from available cash balances.

Analog Devices expects that the repurchases will be completed by the second quarter of Fiscal Year 2022. (See Analog Devices stock charts on TipRanks)

Updated Outlook

The company has raised expectations for Q4 revenue. The top line is now expected to be within $70 million of $2.30 billion, up from the $1.78 billion guided previously. Additionally, the company expects Maxim to contribute nearly $520 million of revenue in this updated outlook.

Adjusted EPS is anticipated to be $1.60 to $1.78 per share. The updated figure includes $0.44 of adjustments related to the net impact of acquisition-related expenses, transaction costs, and restructuring-related expenses.

Analysts’ Viewpoint

Following the Q3 earnings release, Needham analyst Quinn Bolton assigned a Buy rating on the stock, and raised the price target to $200 from $195. The new price target implies 22.5% upside potential to current levels.

Consensus among analysts is a Strong Buy, based on 10 Buys and two Holds. The average Analog Devices price target of $189.73 implies 16.2% upside potential from the current levels.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Analog Devices, with 76.3% of investors maintaining portfolios on TipRanks increasing their exposure to ADI stock over the past 30 days.