Analog Devices Inc (NASDAQ:ADI) (ADI) was cut to Neutral from Overweight at Piper Sandler on Thursday, with analysts maintaining a $190 price target on the stock.
The analysts told investors in a note that they are downgrading the stock based on the macro uncertainty and inventory adjustments.
"We are downgrading shares of ADI to Neutral following the earnings announcement yesterday," explained analysts. "While the company is doing almost everything right in terms of reducing excess inventory, we simply are not comfortable with the timeframe of the economic downturn."
"Given ~50% exposure to the industrial segment for ADI, we feel the company's prospects are likely to be caught up in the economic slowdown, and as such, we are choosing to move to the sidelines," they added.
While Piper Sandler believes the company is executing well to a reduced revenue plan, they add that given the state of China's economy, they are not ready to endorse a bullish view on the stock yet.