Results: Arrow Electronics, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

As you might know, Arrow Electronics, Inc. (NYSE:ARW) just kicked off its latest second-quarter results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 6.4% to hit US$7.6b. Arrow Electronics also reported a statutory profit of US$3.59, which was an impressive 64% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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After the latest results, the five analysts covering Arrow Electronics are now predicting revenues of US$30.4b in 2025. If met, this would reflect a reasonable 6.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 18% to US$10.72. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$29.2b and earnings per share (EPS) of US$9.77 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Check out our latest analysis for Arrow Electronics

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$117, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Arrow Electronics at US$135 per share, while the most bearish prices it at US$98.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. One thing stands out from these estimates, which is that Arrow Electronics is forecast to grow faster in the future than it has in the past, with revenues expected to display 14% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.7% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.0% annually. So it looks like Arrow Electronics is expected to grow faster than its competitors, at least for a while.

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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Arrow Electronics (of which 1 makes us a bit uncomfortable!) you should know about.

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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.