Analog Devices (ADI) is positioned to continue outperforming, with Morgan Stanley citing strong execution and robust industrial segment performance.

The company delivered strong fiscal Q3 results, with revenue of $2.88 billion, up 9.1% quarter over quarter and 24.6% year over year, and adjusted EPS of $2.05, above consensus, driven primarily by the industrial segment, according to the note Thursday.

The company's execution was "impressive" despite input shortages at an internal fabrication facility that weighed on Q3 margins, with Morgan Stanley noting that Q4 revenue is expected to benefit from continued strength in the industrial segment.

The brokerage highlighted potential upside from channel inventory, which is at historically low levels due to real demand in select industrial parts, and noted that management expects to continue undershipping through fiscal 2026, leaving room for channel refill if industrial strength persists.

Morgan Stanley maintained its overweight rating on Analog Devices and raised the price target to $288 from $273.

Shares of Analog Devices were up 1.4% in recent trading.

Price: 248.35, Change: +3.48, Percent Change: +1.42