Analog Devices targets IoT market growth, with surge in operating margins

Evercore ISI initiates coverage on Analog Devices, identifying it as a key player in the burgeoning Internet of Things (IoT) market.

Evercore ISI has recently initiated coverage on Analog Devices (NASDAQ: ADI), giving it an Outperform rating and setting a price target of $254.00. The financial firm highlighted Analog Devices' pivotal role in the rapidly expanding Internet of Things (IoT) market, which is forecasted to encompass tens of billions of units in the coming years.

Projected to see a remarkable surge in operating margins, Analog Devices is expected to witness an expansion of 1,000 basis points over the next decade. Evercore ISI's analysis underscores the revenue synergies arising from Analog Devices' integration with Maxim Integrated and Linear Technology. These integrations are anticipated to fuel one of the most robust growth narratives within the analog and microcontroller unit (MCU) sector.

Moreover, Evercore ISI anticipates a significant increase in Analog Devices' free cash flow per share, expecting it to grow from $6.44 in fiscal year 2023 to $11.82 by fiscal year 2025. This projected growth is attributed to Analog Devices' strategic market positioning and the anticipated synergies from its recent integrations.

The positive outlook from Evercore ISI underscores the broader industry trend towards IoT adoption and Analog Devices' capability to leverage this trend. The integration of Maxim Integrated and Linear Technology is perceived as a catalyst for revenue growth and margin expansion, positioning Analog Devices optimally for future opportunities.