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Analog Devices, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Analog Devices, Inc. (NASDAQ:ADI) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat forecasts, with revenue of US$2.2b, some 2.5% above estimates, and statutory earnings per share (EPS) coming in at US$0.61, 36% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Analog Devices

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earnings-and-revenue-growth

Taking into account the latest results, the 28 analysts covering Analog Devices provided consensus estimates of US$9.34b revenue in 2024, which would reflect a considerable 11% decline over the past 12 months. Statutory earnings per share are forecast to plunge 25% to US$3.24 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$9.17b and earnings per share (EPS) of US$2.71 in 2024. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

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The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 15% to US$248. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Analog Devices analyst has a price target of US$285 per share, while the most pessimistic values it at US$197. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Analog Devices' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 20% annualised decline to the end of 2024. That is a notable change from historical growth of 19% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% per year. It's pretty clear that Analog Devices' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Analog Devices' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Analog Devices' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Analog Devices going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether Analog Devices' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.