Avnet, Inc. (NASDAQ:AVT) Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates
Avnet, Inc. (NASDAQ:AVT) shareholders are probably feeling a little disappointed, since its shares fell 3.5% to US$45.64 in the week after its latest quarterly results. Avnet reported US$6.2b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.28 beat expectations, being 3.8% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Avnet
Taking into account the latest results, the current consensus, from the eight analysts covering Avnet, is for revenues of US$24.1b in 2024. This implies a noticeable 6.1% reduction in Avnet's revenue over the past 12 months. Statutory earnings per share are forecast to tumble 25% to US$5.59 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$24.5b and earnings per share (EPS) of US$5.88 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at US$48.07, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Avnet, with the most bullish analyst valuing it at US$57.00 and the most bearish at US$40.00 per share. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 12% annualised decline to the end of 2024. That is a notable change from historical growth of 8.5% 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 5.0% annually for the foreseeable future. It's pretty clear that Avnet's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Avnet. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$48.07, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. 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..
Plus, you should also learn about the 4 warning signs we've spotted with Avnet (including 2 which shouldn't be ignored) .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
