Avnet, Inc. (NASDAQ:AVT) Just Reported And Analysts Have Been Cutting Their Estimates

Investors in Avnet, Inc. (NASDAQ:AVT) had a good week, as its shares rose 4.5% to close at US$51.09 following the release of its quarterly results. Revenues of US$5.7b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.97, missing estimates by 2.0%. 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.

See our latest analysis for Avnet

Taking into account the latest results, the current consensus, from the seven analysts covering Avnet, is for revenues of US$22.8b in 2025. This implies a small 7.7% reduction in Avnet's revenue over the past 12 months. Statutory earnings per share are expected to plunge 30% to US$4.45 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$24.5b and earnings per share (EPS) of US$6.22 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

The analysts made no major changes to their price target of US$48.83, suggesting the downgrades are not expected to have a long-term impact on Avnet's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Avnet analyst has a price target of US$57.00 per share, while the most pessimistic values it at US$40.00. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.2% by the end of 2025. This indicates a significant reduction from annual growth of 8.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Avnet is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$48.83, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Avnet. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Avnet going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Avnet has 2 warning signs (and 1 which is concerning) we think 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.