Truist Securities raised its price target on Analog Devices (NASDAQ:ADI) to $364 from $291 on Wednesday, while maintaining a Hold rating on the shares. The revised objective sits near ADI's most recent trading level of $349.90. Over the past 12 months the stock has gained 45.7% and is trading roughly 1% below its 52-week high of $355.36.
The firm attributed the change to cyclical strength developing across the semiconductor company’s business. Truist highlighted that Analog Devices produced a strong fourth calendar quarter and that its outlook for the first calendar quarter was even stronger, driven by cyclical demand, idiosyncratic factors, and anticipated price increases.
Reflecting this momentum, InvestingPro data show ADI delivered a 51.4% total price return in the past six months. That same data also suggest the stock may be in overbought territory according to relative strength index indicators.
On the fundamentals side, Truist lifted its calendar year 2027 earnings-per-share forecast for Analog Devices to $12.98 from $11.18. The updated price target is derived from a 28 times multiple, which the firm says represents a historical six times discount to analog peers.
That methodology stands in contrast to the company's current valuation metrics. ADI is trading at a price-to-earnings ratio of 61.7, a level the firm describes as substantially higher than the company’s projected earnings growth rate, resulting in a PEG ratio of 1.91.
Despite acknowledging better-than-expected performance from Analog Devices this cycle, Truist continued to recommend investors focus on direct artificial intelligence investments, specifically naming Nvidia, AMD, and Broadcom as companies that offer stronger growth prospects relative to valuation. The analyst who issued the update noted that keeping a Hold rating may appear counterintuitive in light of the company’s recent strength.
Analog Devices' robust financial results and upbeat guidance have prompted a string of analyst reactions.
The company reported strong first-quarter fiscal 2026 results and issued second-quarter guidance that exceeded consensus, with growth notably coming from artificial intelligence, data center, communications, and consumer end markets.
Needham moved to a Buy rating and set a $400 price target, citing the company’s strong performance as the reason to upgrade. Piper Sandler raised its own price target to $360, underscoring Analog Devices’ position in AI and data center markets. KeyBanc increased its target to $430, pointing to upside in communications and consumer segments, including wearables and iPhone-related opportunities. Bernstein raised its price target to $375, noting an improved outlook despite the stock’s elevated valuation. Raymond James lifted its target to $385 and emphasized five consecutive quarters of above-market growth for the company.
Collectively, these analyst moves reflect broad market recognition of Analog Devices’ recent operating strength and improved forward visibility. At the same time, elevated valuation metrics and technical indicators cited by InvestingPro introduce cautions about the stock’s current relative momentum.
Summary
Truist increased its price target on Analog Devices to $364 while leaving its rating at Hold. The firm raised its 2027 EPS estimate and pointed to cyclical demand, idiosyncratic factors, and expected price increases as drivers of stronger results. Multiple other brokerages also raised targets or ratings after the company reported robust fiscal results and provided better-than-expected guidance.
Key points
- Truist raised ADI's price target to $364 from $291 and kept a Hold rating; stock trading near $349.90.
- Truist increased its calendar year 2027 EPS estimate to $12.98 from $11.18 and used a 28 times multiple for the target.
- Multiple analysts raised price targets and ratings following strong fiscal results and guidance, with noted strength in AI, data center, communications, and consumer segments.
Risks and uncertainties
- Valuation risk - ADI's current P/E of 61.7 and PEG of 1.91 indicate the stock trades at a premium to projected earnings growth, which could present downside if growth moderates.
- Technical/market risk - InvestingPro signals suggest the stock may be overbought based on RSI indicators, introducing short-term momentum risk.
- Analyst divergence - While several firms raised targets and ratings, Truist retained a Hold and recommended focusing on other direct AI investments, illustrating varied views on trade-offs between growth and valuation.
Sectors impacted
- Semiconductors - company performance and analyst coverage affect sector sentiment.
- Data center and artificial intelligence infrastructure - cited as key areas of growth supporting ADI’s outlook.
- Communications and consumer electronics - highlighted as upside contributors, including wearables and smartphone-related demand.