12:03 PM EST, 02/20/2025 (MT Newswires) -- Analog Devices ( ADI ) delivered a "modest" beat and raise in its fiscal Q1 results as conditions are improving, Morgan Stanley said in a note emailed Thursday.

The company's "execution during the downturn was exemplary, with operating margins bottoming in the high 30s, which argues for a higher through cycle ROI/multiple," the investment firm said.

Morgan Stanley highlighted the fact that Analog Devices' ( ADI ) industrial and automotive bookings are improving, with strength in China's automotive sector driving growth, while the US and Europe are still weak.

"While Chinese automotive exposure raises questions given an environment of trade tensions, we view

the differentiated portfolio as an important protection," the note said.

Meanwhile, sectors like communications infrastructure and communications are a "bit mixed," the investment firm said, adding it sees some green shoots in the wireline communications and optical sectors.

Morgan Stanley kept Analog Devices' ( ADI ) overweight rating with a $250 price target, saying it sees the company as a "core holding" amid uncertain macroeconomic conditions.

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