Trust cuts Analog Devices as part of semiconductor sector downgrade

Truist downgraded Analog Devices to Hold from Buy with a price target of $233, down from $266. The firm also downgraded the semiconductor industry to Neutral from Constructive. Industry revenue growth has peaked and is entering a “slow fade,” while stock investment returns have been robust cycle-to-date, making significant additional returns from here more challenging, the analyst tells investors in a research note. Truist recognizes Analog Devices’ fundamentals appear to have recently bottomed, and it expects a significant recovery in 2025, but says the stock is also trading at 28-times estimates 2025 earnings. This represents an historical peak for the company, the analyst tells investors in a research note. Truist believes much of Analog Devices’ potential upside is already embedded in the stock price.