Arrow Electronics, Inc. Just Beat EPS By 31%: Here's What Analysts Think Will Happen Next

Arrow Electronics, Inc. (NYSE:ARW) just released its latest quarterly results and things are looking bullish. The company beat forecasts, with revenue of US$11b, some 7.1% above estimates, and statutory earnings per share (EPS) coming in at US$6.17, 31% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following the latest results, Arrow Electronics' four analysts are now forecasting revenues of US$46.5b in 2027. This would be a notable 19% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$20.20, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$43.2b and earnings per share (EPS) of US$20.20 in 2027. There doesn't appear to have been a major change in sentiment following the results, other than the small increase to revenue estimates.

Check out our latest analysis for Arrow Electronics

As a result, it might come as a surprise that the consensus price target has been cut 5.3% to US$223, which could suggest that these earnings are considered less valuable by the market than previously. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Arrow Electronics at US$240 per share, while the most bearish prices it at US$200. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Arrow Electronics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 15% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 2.3% a year 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 14% annually. So it looks like Arrow Electronics is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Arrow Electronics' future valuation.

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. We have forecasts for Arrow Electronics going out to 2028, and you can see them free on our platform here.

It might also be worth considering whether Arrow Electronics' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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