Arrow: No Slowdown In European Demand
Analysts at Brean Murray reiterate their "buy" rating on Arrow Electronics Inc (NYSE: ARW). The target price for ARW is set to $40.
Arrow Electronics has not seen any slowdown in European demand till now. “As a point in time, these comments are positive and consistent with comments we’ve heard from numerous companies the last couple weeks; that said, our view is that we likely won’t know the impact from any European fallout for perhaps a few months, at the least; so, while we remain optimistic regarding IT spending given demand checks and positive comments from various management teams, we realize things are still touch and go / wait and see,” the analysts mention.
According to Brean Murray, “Arrow’s long-term margin guidance clearly suggests material upside to our margin estimates, management did lower it from its previous guidance purely due to mix (mix of components vs. technology solutions, and mix across geographies.)” The analysts add, “We continue to view this as a $40 stock as leverage is (1) more pronounced (operating margins for the March quarter were 3.61% vs. our 2.99% forecast) and (2) perhaps playing out a bit longer given the significant strength in demand.”
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