Yahoo Finance Analysts Have Lowered Expectations For Avnet, Inc. (NASDAQ:AVT) After Its Latest Results
Avnet, Inc. (NASDAQ:AVT) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. 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%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Avnet
Following the recent earnings report, the consensus from seven analysts covering Avnet is for revenues of US$23.1b in 2025. This implies a noticeable 6.5% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to descend 15% to US$5.38 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$6.22 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.
Despite the cuts to forecast earnings, there was no real change to the US$48.17 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Avnet shareholders.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.2% 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 6.1% 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Avnet. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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.
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 Avnet going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for Avnet (1 is significant!) that we have uncovered.
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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.
