Benzinga | Jun 24, 2021 12:23PM EDT

Here's Why This Analyst Is Bullish About Analog Devices

Through organic growth and the strategic acquisitions of Hittite, Linear Technology, and Maxim, Analog Devices, Inc. (NASDAQ:ADI) has built "the preeminent franchise" in precision analog semiconductors, which is among the most attractive segments of the semiconductor industry, according to Needham.

The Analog Devices Analyst: Quinn Bolton initiated coverage of Analog Devices with a Buy rating and a price target of $195.

The Analog Devices Thesis: The company is a leader in high-performance catalog analog solutions and enjoys industry-leading margins, Bolton said in the initiation note.

He believes investors "should view Analog Devices as a core holding in any semiconductor portfolio."

"While a diversified business, Analog Devices has exposure to several high growth end markets including instrumentation & test, factory automation, 5G wireless infrastructure and automotive that should allow the company to grow at an HSD CAGR or faster than the analog market overall," the analyst wrote.

The consumer businesses of both Analog Devices and Maxim "have been facing headwinds for several years due in large part to lost sockets at smartphone OEMs," Bolton said. "However, these headwinds are abating in 2021 as the impact of the socket losses are not largely behind both companies while new design wins across several end-use applications ramp," he added.

ADI Price Action: Shares of Analog Devices had risen by 1.877% to $166.52 at the time of publication Thursday.