Analyst: This Apple Supplier Can Surge 23%

ADI stock hit a record high last week

by Karee Venema

Published on Apr 30, 2019 at 3:02 PM
Updated on Jun 24, 2020 at 10:16 AM

RBC initiated coverage on Analog Devices, Inc. (NASDAQ:ADI) with an "outperform" rating and $140 price target, a 22.9% premium to last night's close. The analyst in coverage called the semiconductor name the "5G Analog asset of choice," and expects its communications segment to outperform through next year.

In reaction, ADI stock is up 2.3% at $116.52, putting shares of the Apple supplier within a chip-shot of their April 24 record high of $118.54. More broadly, the equity is pacing for an April gain of almost 11%, and has surged 35% so far in 2019.

analog devices stock daily price chart april 30

Analysts are split when it comes to the outperforming tech stock, though. At last night's close, nine brokerages maintained a "strong buy" rating on ADI, compared to 10 "holds," and not a single "sell." Meanwhile, the average 12-month price target of $117.61 is in line with Analog Devices' current perch.

Options traders, on the other hand, have taken a distinctly bullish stance toward ADI. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 2.16 ranks in the 74th annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

With Analog Devices earnings scheduled for release the morning of Wednesday, May 22, it's getting a little pricier to purchase premium on short-term options, from a volatility standpoint. ADI's 30-day at-the-money implied volatility was last seen at 28.4%, which registers in the elevated 73rd annual percentile.

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