Sterne Agee Reiterates Buy Rating On Analog Devices

According to Sterne Agee, Analog Devices ADI Buy rating is reiterated. Sterne Agee said that it believes management continues to see long-term revenue growth rate in the 8-12% Y/Y range, well above current F12E consensus of ~5%. “We should note that F11E(Oct) was in the 6% range and has now moved up to 12% given solid execution from ADI. ADI has decreased share count by ~25% over the last 4-5 years. We believe ADI continues to implement prudent buyback. We believe ADI could look for small tuck-in acquisitions. Reiterating our Buy rating and $50 PT on ADI, a 15x forward C12/F12E P/E, as street estimates continue to be conservative. ADI has traded between 11x-34x P/E in the last five years. ADI could benefit from broad-based communications and industrial demand in 2011-12, and we believe potential catalysts are lining up with a solid execution and significant share repurchases. ADI exited the quarter with $8.28 in net cash per share, a 2.5% dividend yield and tangible book of $11.56.” Analog Devices closed on Friday at $40.55.