Analog Devices, Inc. (NASDAQ:ADI) — This semiconductor company manufactures high-performance integrated circuits used in analog and digital signal processing applications.
On Wednesday, it reported better-than-expected fiscal 2015 first-quarter results. Revenue jumped 23% year over year to $772 million, while adjusted earnings rose 27% to $0.62, beatings Zacks estimate by a penny. The next day, the research firm upgraded ADI stock to Zacks Rank #1 (strong buy).
Also following the earnings report, Stifel Nicolaus boosted its price target for shares to $68 from $66. Its analysts maintained their “buy” rating and said they expect the company to post strong numbers throughout the year.
Credit Suisse Group AG (ADR) (NYSE:CS) reiterated its “outperform” rating on ADI stock, raising its target to $65 from $60.
Following a deep “V” sell-off in October, ADI stock recovered and consolidated within a broad “W” formation supported by a golden cross and twin buy signals from my proprietary indicator, the Collins-Bollinger Reversal (CBR). The consolidation took place in a range between $52 and $57.50.
On Tuesday, the stock broke from the “W” boosted by twin CBR buy signals and a high-volume break above the 50-day moving average at $55.23 and the resistance line at $57.50.
Breakouts from “W” consolidations are often followed by shallow pullbacks, so I’m setting my buy under price at $57.50. My trading target for ADI stock is $65, which would result in a gain of 13%. The company increased its quarterly cash dividend by 8% to $0.40 per share for a forward annual yield of 2.7%.
