Deutsche Bank Upgrades Arrow Electronics (ARW) to Buy, New Lower Price Target Calls for 23% Upside

Deutsche Bank upgraded shares of Arrow Electronics (NYSE: ARW) to a Buy rating from its previous rating of Hold due to the recent pullback in the stocks price.

The firm is also lowering its price target from $50 to $48 and notes that the stock is currently trading at 6.5x its 2012 EPS estimate. Deutsche believes that ARW is positioned for healthy growth and operating margin leverage given its recent acquisitions.

Based on its direct cash flows analysis, the firm forecasts long-term growth of 3 percent and a WACC of 9.5 percent.

An analyst at Deutsche comments, "We expect ARW's shares to move along with the overall market, as spending on electronic components and computer products is highly dependent on overall IT spending. We also believe post-dot.com multiples are the most appropriate way to value ARW's shares."

Downside risk to the firms new Buy call includes a major correction in the semis market, weakness in industrial spending, a decline in Europe, increased mix of revenue from Asia, and the inability to realize benefits from the company's recent acquisitions.

For more ratings news on Arrow Electronics click here and for the rating history of Arrow Electronics click here.

Shares of Arrow Electronics closed at $38.30 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Truist Securities Reiterates Buy Rating on Arrow Electronics (ARW)
• Jefferies Upgrades Minerva Neurosciences (NERV) to Buy
• Keefe, Bruyette & Woods Upgrades Nayax (NYAX) to Outperform