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.