Wells Fargo analyst Joseph Quatrochi maintained a Sell rating on Arrow Electronics (ARW – Research Report) yesterday and set a price target of $98.00.
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Joseph Quatrochi has given his Sell rating due to a combination of factors including the ongoing challenges in the semiconductor cycle and limited visibility of recovery. Arrow Electronics is experiencing difficulties in predicting the timing and shape of a potential industry rebound, which creates uncertainty for future performance. Additionally, the company is focusing on cost reduction to stabilize margins and earnings, but this effort underscores the struggle to maintain profitability.
Moreover, while there were improvements in some leading indicators, such as the book-to-bill ratio approaching parity, there is still a sub-seasonal demand pattern expected in certain regions. The inventory levels have increased due to lower-than-expected sales, adding to the cautious outlook. Although there has been some positive movement in cash flow, the overall financial guidance for the upcoming quarters is conservative, with revenue and EPS estimates being adjusted downward, reinforcing the Sell recommendation.
According to TipRanks, Quatrochi is a 5-star analyst with an average return of 18.1% and a 62.30% success rate. Quatrochi covers the Technology sector, focusing on stocks such as Synopsys, ARM Holdings PLC ADR, and Applied Materials.