Analog Devices Still Sees Robust Demand in Industrial and Automotive Chips; Raising FVE to $186

Analog Devices reported strong fiscal fourth-quarter results and provided investors with a decent forecast for the January quarter. Although ADI cited demand uncertainty and weakening macroeconomic conditions, the company still foresees strong year-over-year revenue growth as the global chip shortage (particularly in automotive and industrial semis) carries on. We raise our fair value estimate for wide-moat ADI to $186 from $172, mostly due to the time value of money as we roll our valuation model. Shares in this high-quality chipmaker still appear modestly undervalued to us.