Analog Devices (ADI) Stock Up on Linear Technologies Acquisition, Barclays Lifts Price Target
Bloomberg News
NEW YORK (TheStreet) -- Shares of Analog Devices (ADI) - Get Report are up by 6.63% to $67.04 in pre-market trading Wednesday, after the company announced an agreement to acquire Linear Technologies (LLTC) for a total equity value of $14.8 billion.
The Norwood, MA-based semiconductor company expects approximately $5 billion in annual revenues from the merger.
In response, Barclays raised Analog Device's price target to $64 from $55 to reflect "better results and investor sentiment."
The acquisition was likely a surprise to most investors but "makes clear sense from a product portfolio perspective," the firm said.
Barclays does not expect a higher bid considering the high valuation Analog Devices paid and expects the transaction to be immediately accretive to non-GAAP EPS and FCF.
The deal values the combined enterprise at approximately $30 billion.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate ANALOG DEVICES as a Buy with a ratings score of B+. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: ADI
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