New York, 22 August (Kiran News): Analog Devices (NASDAQ:ADI) has reported stronger-than-expected quarterly results and issued an optimistic outlook, highlighting momentum across industrial and communications sectors along with new structural growth drivers in artificial intelligence (AI), aerospace, and automation.
Following the results, JP Morgan analyst Harlan Sur maintained an Overweight rating on ADI and raised the price target from $300 to $310. Sur pointed to a stronger cyclical recovery and expanding secular drivers, increasing his projections for fiscal 2026 earnings per share to approximately $8.85, applying a 35x multiple at the high end of peer group valuations to reflect ADI’s premium margins and diversified growth profile.
For the July quarter, revenue rose 9% quarter-on-quarter to $2.88 billion, surpassing consensus estimates of $2.765 billion. Earnings per share came in at $2.05, compared to the expected $1.95. Growth was broad-based, with industrial revenue up 11% quarter-on-quarter and 23% year-on-year, communications surging 18% quarter-on-quarter and 42% year-on-year, and consumer climbing 17% quarter-on-quarter and 20% year-on-year. Automotive remained flat sequentially but gained 23% year-on-year.
Looking ahead to the October quarter, ADI has guided revenue to $3.0 billion, up 4% quarter-on-quarter and above consensus expectations of $2.823 billion. Projected earnings per share are $2.22 versus $2.03 expected, with an operating margin of 43.5% compared to 42.4% consensus. Industrial is expected to lead growth with low-to-mid-teens sequential gains, while automotive is projected to decline in the low-teens quarter-on-quarter.
Sur highlighted ADI’s structural growth engines, including aerospace and defense now contributing more than $1 billion annually (around 10% of revenue), rising AI and datacenter opportunities in optical networking and power systems expected to reach $550–$600 million annually, and industrial automation growth from humanoid robotics design wins.
ADI has also demonstrated strong capital returns, with $3.7 billion in free cash flow (35% margin) over the past 12 months and $1.6 billion returned to shareholders through dividends and buybacks.
At last check on Thursday, ADI stock was trading up 1.73% at $249.04.
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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