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Arrow Electronics Inc ARW

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Morningstar’s Analysis

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Asian Sales Break Records as Arrow Hits the Target; Raise FVE to $115

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Narrow-moat Arrow Electronics kicked off 2021 with quarterly revenue and adjusted EPS exceeding our expectations and the high end of management’s guidance by a healthy margin. As witnessed in the results of Arrow’s close competitor Avnet last week, this strength was spearheaded by robust growth in Asian component sales. Management also provided strong guidance implying continued year over year and sequential growth through the second quarter. With an impressive quarter and an upward revision of our near-term growth projections due to strong guidance, we are raising our fair value estimate for narrow-moat Arrow to $115 per share from $107 per share. With shares trading around $113, we believe shares are fairly valued.

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Company Profile

Business Description

Arrow Electronics is a leading value-added distributor of semiconductors, electronic components, software, and enterprise infrastructure hardware. The company operates in two segments: global components, which includes the sale of semiconductors, and global enterprise computing solutions, which includes the sale of software, storage, and servers. Arrow primarily serves small to midsize electronic equipment manufacturers and value-added resellers.

Contact
9201 East Dry Creek Road
Centennial, CO, 80112
T +1 303 824-4000
Sector Technology
Industry Electronics & Computer Distribution
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 19,600

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