Barclays moved Analog Devices (NASDAQ: ADI) up a notch on its rating scale on Thursday, promoting the company from Equalweight to Overweight and increasing its price target to $375 from $315. The broker framed the upgrade around ADI's industrial-heavy revenue mix and other operational metrics it views as differentiating within the analog semiconductor peer group.
Industrial exposure and PMI linkage
In its rationale, Barclays emphasized Analog Devices' sizable exposure to industrial end markets within the analog semiconductor cohort. The research note pointed to a strong correlation between year-over-year sales growth at ADI and Purchasing Managers' Index (PMI) readings, calling ADI "a quality name to own as PMIs recover." This linkage underpins the firm's view that improvements in industrial activity should support the company's top-line trajectory.
Margin profile and inventory position
Barclays also highlighted what it terms ADI's best-in-class margin profile. The firm noted gross margins near 70% and operating margins in the 40-45% range, describing these as industry-leading metrics. On inventory, Barclays observed that ADI carries roughly 130 days on a GAAP basis versus approximately 180 days for peers, a differential the broker flagged as a favorable working-capital metric relative to competitors.
Communications segment outlook
The research house expects meaningful upside in ADI's communications business. Under an assumption that two-thirds of communications revenue grows in line with cloud capital expenditure in 2026-2027, Barclays sees potential low-double-digit to mid-teens percentage upside versus consensus for that line of business. Reflecting this view, Barclays revised its communications segment projections to 43% growth in 2026 and 15% growth in 2027.
Broader analyst activity and corporate update
Other broker moves accompany Barclays' action. UBS raised its price target to $400 while maintaining a Buy rating, noting ADI's positioning in areas including data centers and aerospace. TD Cowen increased its target to $355, pointing to stronger industrial demand and gains in automated test equipment and aerospace. Stifel lifted its target to $330, keeping a Buy rating and calling ADI a notable competitor in high-performance analog. Wells Fargo upgraded ADI to Overweight and set a $340 target, citing expected fiscal 2026 growth momentum.
On governance, Analog Devices added Dr. Yoky Matsuoka to its board, expanding the board to 11 members. Dr. Matsuoka, an executive at Panasonic Holdings, was cited as bringing expertise in global innovation and business development.
Taken together, the analyst upgrades, target increases, and the board appointment constitute a cluster of developments that market watchers and investors will interpret as supportive signals for ADI's near-term outlook.