Bank of America analyst Ruplu Bhattacharya has adjusted the price target for Arrow Electronics (ARW, Financial), increasing it from $99 to $105, while maintaining an Underperform rating. This decision follows the company's recent quarterly report. The firm's projections for fiscal year 2025 have been revised, with expected revenue now at $29 billion, up from a previous estimate of $27.8 billion, and earnings per share slightly adjusted to $10.24 from $10.25. Despite these changes, a lower valuation multiple is applied to the higher earnings due to Arrow Electronics' status as a cyclical stock.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Arrow Electronics Inc (ARW, Financial) is $118.26 with a high estimate of $135.30 and a low estimate of $98.00. The average target implies an upside of 2.70% from the current price of $115.15. More detailed estimate data can be found on the Arrow Electronics Inc (ARW) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, Arrow Electronics Inc's (ARW, Financial) average brokerage recommendation is currently 3.1, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Arrow Electronics Inc (ARW, Financial) in one year is $119.49, suggesting a upside of 3.77% from the current price of $115.15. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Arrow Electronics Inc (ARW) Summary page.
ARW Key Business Developments
Release Date: May 01, 2025
- Consolidated Sales: $6.8 billion, exceeding guidance range, down 2% year-over-year, flat on a constant currency basis.
- Global Component Sales: $4.8 billion, above guidance range, down 1% versus prior quarter, flat sequentially in constant currency.
- Enterprise Computing Solutions Sales: $2 billion, above guidance range, 18% higher year-over-year, 19% higher in constant currency.
- Non-GAAP Gross Margin: 11.3%, down 120 basis points year-over-year, down 40 basis points sequentially.
- Non-GAAP Operating Expenses: $593 million, grew $13 million sequentially, $25 million lower year-over-year.
- Non-GAAP Operating Income: $179 million, 2.6% of sales.
- Non-GAAP Diluted EPS: $1.80, above guided range.
- Cash Flow from Operations: $352 million.
- Gross Balance Sheet Debt: $2.8 billion.
- Share Repurchase: $50 million repurchased, $275 million remaining authorization.
- Q2 Sales Guidance: $6.7 billion to $7.3 billion.
- Q2 Global Component Sales Guidance: $4.8 billion to $5.2 billion.
- Q2 Enterprise Computing Solutions Sales Guidance: $1.9 billion to $2.1 billion.
- Q2 Non-GAAP Diluted EPS Guidance: $1.90 to $2.10.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Arrow Electronics Inc (ARW, Financial) reported consolidated and segment sales, as well as earnings per share, that exceeded the high end of their guidance ranges.
- The global components business saw stronger sales than anticipated, with all three regions performing ahead of typical seasonality.
- The enterprise computing solutions business delivered year-over-year billings growth with solid operating leverage.
- The ECS backlog grew by more than 50% year over year, reflecting alignment to higher growth demand trends across enterprise IT.
- Arrow Electronics Inc (ARW) generated positive cash flow from operations for the seventh consecutive quarter, amounting to $352 million in Q1 2025.
Negative Points
- Consolidated non-GAAP gross margin was down approximately 120 basis points versus the prior year, driven primarily by overall mix in both global components and ECS.
- Non-GAAP operating expenses grew $13 million sequentially to $593 million, although they continue to decline year over year.
- The company faces uncertainty due to rapidly evolving trade policies and tariffs, which could impact near-term demand trends.
- Inventory levels remain somewhat elevated, with pockets of excess inventory still present, although the aging profile is improving.
- Interest and other expenses were $56 million in the first quarter, contributing to financial pressures.
