Bank of America Merrill Lynch Reinstating Coverage On Analog Devices Inc.

Bank of America Merrill Lynch has a Buy rating and a $47 price target on shares of Analog Devices Inc. ADI, as it reinstates coverage on the name. In a note to clients, BAML writes, "We reinstate analog chipmaker Analog Devices (ADI) with a Buy and $47 PO on its: 1) over 80% exposure to late-cycle, diversified and high margin industrial, auto and communication infrastructure markets; 2) relative gross margin stability from its flexible manufacturing model; 3) recent beat-and-raise results and dividend boost (yield now 2.4%); and 4) attractive 10x PE ex the $8.15 in net cash/share. Our $47 PO is based on 15x 2012 PE, at high end of comps reflecting ADI's growth opportunities and defensive business model." Shares of ADI gained 17 cents on Friday to close at $40.55, a gain of 0.4%.