There are better names off the bottom in semiconductor stocks than Analog Devices , according to Barclays. Analyst Blayne Curtis downgraded shares of Analog Devices to equal weight from overweight, and lowered the price target, saying the semiconductor stock has yet to price in a correction. “We expect Analog cuts to increase into next year and recommend rotating out of the sub-sector sooner rather than later. There is much to unwind in the wake of pandemic-induced demand, which drove not only higher units but also elevated pricing, margins, and inventory,” Curtis wrote in a Monday note. The analyst cut the price target to $140 from $180. The new price target is 4.5% below where shares closed Friday at $146.59. The stock is down 0.7% in the premarket on Monday. Shares are down 16.6% year to date. The analyst said he will be reviewing commentary from management for any changes to order books, cancellations and inventory. “Looking for slowing in Auto and Industrial after their last earnings call cited slowing orders, softening channel sell through, and modest cancellations (not specific to any end market or geography) and book to bill levels trickled down led by Consumer and Comm,” Curtis wrote in a Monday note. “With inventories building (+24% over the last 2 quarters) and supply opening up, it’s only a matter of time before orders/backlog come down to match weaker real demand,” he added. Separately, the analyst upgraded shares of Texas Instruments to equal weight from underweight, saying the Dallas, Texas-based company should benefit from the CHIPS Act that seeks to boost semiconductor manufacturing in the United States. The analyst downgraded shares of other semiconductor stocks NXP Semiconductors and Qorvo to equal weight. Shares of Silicon Laboratories were downgraded to underweight. —CNBC’s Michael Bloom contributed to this report.
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