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Avnet Beats Top- and Bottom-Line Estimates; Maintain $32 FVE; Shares Overvalued

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Narrow-moat Avnet reported strong fiscal second-quarter results, with both the top and bottom lines exceeding the high end of previous guidance by a healthy margin. The company's strong showing was bolstered by robust demand in Asia. Also, due to the resumption of manufacturing activity after pandemic-induced slowdowns, the company also saw strong demand in the auto and industrials verticals. We maintain our $32 fair value estimate for this narrow-moat name. With shares trading around $37, we view Avnet shares as overvalued.

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Company Profile

Business Description

Avnet is a leading value-added distributor of electronic components. The company's customer base is composed of original equipment manufacturers, or OEMs, electronic manufacturing services, or EMS, providers and original design manufacturers, or ODMs. The firm operates in two groups--electronic components and Farnell, the latter of which was acquired by Avnet in October 2016.

2211 South 47th Street
Phoenix, AZ, 85034
T +1 480 643-2000
Sector Technology
Industry Electronics & Computer Distribution
Most Recent Earnings Dec 31, 2020
Fiscal Year End Jun 27, 2021
Stock Type Cyclical
Employees 14,600