Results: Arrow Electronics, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
Arrow Electronics, Inc. (NYSE:ARW) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.7% to hit US$6.9b. Arrow Electronics reported statutory earnings per share (EPS) US$2.01, which was a notable 17% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Arrow Electronics
Taking into account the latest results, the seven analysts covering Arrow Electronics provided consensus estimates of US$27.7b revenue in 2024, which would reflect a small 6.5% decline over the past 12 months. Statutory earnings per share are forecast to tumble 26% to US$8.22 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$27.3b and earnings per share (EPS) of US$8.02 in 2024. So the consensus seems to have become somewhat more optimistic on Arrow Electronics' earnings potential following these results.
There's been no major changes to the consensus price target of US$129, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Arrow Electronics, with the most bullish analyst valuing it at US$141 and the most bearish at US$100.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 13% by the end of 2024. This indicates a significant reduction from annual growth of 4.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.2% per year. It's pretty clear that Arrow Electronics' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Arrow Electronics following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Arrow Electronics' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Arrow Electronics going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 4 warning signs for Arrow Electronics that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com