Shares of global semiconductor major Analog Devices (NASDAQ:ADI) are under pressure today after its Q4 revenue tanked by 16.3% year-over-year to $2.72 billion. Furthermore, its EPS of $2.01 missed expectations by a thin margin of 0.01.
Amid a difficult macroeconomic backdrop, Vincent Roche, the CEO and Board Chair of Analog Devices, expects “customer inventory digestion to persist into the first half of the year,” pointing to a return to normal lead times for the company.
At the same time, the company is witnessing gains in its Industrial and Automotive businesses. Despite its focus on execution, ADI’s operating margin contracted by 1,050 basis points to 23.4%. Still, free cash flow remained robust at $3.6 billion for the full year.
The company returned over $4.6 billion to investors in 2023 through share repurchases and dividends. It has declared a quarterly dividend of $0.86 per share. The ADI dividend is payable on December 14 to investors of record on December 4.
For the upcoming quarter, Analog Devices anticipates revenue of $2.5 billion, +/-$100 million. EPS for the quarter is seen landing at $1.70, +/-$0.10.
What is the Price Target for ADI?
Overall, the Street has a Strong Buy consensus rating on Analog Devices. Following a nearly 9% rise in the company’s shares over the past month, the average ADI price target of $200.07 per share implies a modest 8.8% potential upside.
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