ARW
Arrow Electronics, Inc.
$204.10
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 8.7% below fair value
You pay
$204.10
Bear
$178.90
Fair
$223.62
Bull
$268.35
Bear
$178.90
-12.3%
$15.10 × 12x P/E
Fair
$223.62
+9.6%
$15.10 × 15x P/E
Bull
$268.35
+31.5%
$15.10 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
13.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $215.00 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $223.62 per share.
Warnings
The company's reported profits differ from official accounting profits by 38%. Check what costs are being left out of the adjusted number.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples