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Is Avnet (AVT) Worth Buying Amid Current Market Uncertainties?
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Avnet (AVT - Free Report) is one of the stocks investors should currently add to their portfolio to shrug off highly volatile market conditions and benefit from its upside potential.
From the start of 2022, Wall Street has been witnessing high volatility due to several ongoing economic tensions, such as the outbreak of new COVID-19 variants, skyrocketing crude oil prices, rising inflationary pressure and a shift in Fed’s policy to a tougher-than-expected line. Moreover, the ongoing Russia-Ukraine conflict remains a key concern among potential investors.
Such geopolitical uncertainties are likely to continue to weigh on investors’ sentiments, which might eventually bring higher volatility to the U.S. equity market. Year to date (“YTD”), the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 have plunged 13.6%, 27.5% and 18.2%, respectively.
In such a scenario, growth-rated stocks like Avnet can boost one’s portfolio. AVT’s price trend reflects that the stock has an impressive run on the bourse YTD. Shares of the company have climbed 12.4% against the Zacks Electronics – Parts Distribution industry, which dropped 4.1% YTD.
Image Source: Zacks Investment Research
Why Is AVT an Attractive Pick?
Attractive Valuation: Avnet currently trades at an attractive valuation multiple. The stock trades at a one-year forward price-to-earnings multiple of 6.65X compared with its five-year average of 11.29X.
Solid Rank & Growth Score: Avnet currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities to investors. Thus, the company appears to be a compelling investment proposition at the moment.
Positive Earnings Surprise History: AVT has an impressive earnings surprise history. The company outpaced estimates in the trailing four quarters, delivering an average earnings surprise of 21.2%.
Strong Earnings Growth Potential: The Zacks Consensus Estimate of $6.83 per share for fiscal 2022 earnings suggests year-over-year growth of approximately 152%. The consensus mark for fiscal 2023 earnings indicates a 2.2% year-over-year surge and is pegged at $6.98 per share. Moreover, the long-term expected earnings growth rate for the stock is pegged at 37.2%.
Robust Fundamental Growth Drivers: Avnet is benefiting from the robust demand for its products in the communication and defense market. The company intends to focus on high-growth businesses only and divest low-profit or loss-making businesses.
Per the market research firm,Gartner, worldwide IT spending is anticipated at $4.4 trillion in 2022, suggesting an increase of 4% from 2021. It forecasts that worldwide spending on IT services will be up 6.8% year over year to $1.27 trillion this year. This is an upside for Avnet.
The company’s continued focus on boosting its IoT capabilities is helping it expand in newer markets and gain customers. On the IoT front, the company has made several partnerships with the likes of AT&T and acquisitions, such as Dragon Innovation, Premier Farnell and Hackster.io, to enhance its capabilities in this space. Per the company, such acquisitions have expanded its reach to more than two million customers and an active community of more than 750,000 entrepreneurs, makers and engineers.
Avnet expects to replace Texas Instruments revenues with higher-margin revenues by the end of fiscal 2022. Considering its growth prospects, it makes sense to invest for long-term gains.
The Zacks Consensus Estimate for Axcelis’ second-quarter fiscal 2022 earnings has been revised 3 cents northward to 99 cents per share over the past 60 days. For 2022, earnings estimates have moved 10.3% north to $4.40 per share in the past 60 days.
Axcelis' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.5%. Shares of ACLS have soared 38.6% in the past year.
The Zacks Consensus Estimate for Baidu’s second-quarter 2022 earnings has been revised 31 cents southward to $1.38 per share over the past 30 days. For 2022, earnings estimates have moved 3 cents north to $8.27 per share in the past 30 days.
Baidu's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 52.9%. Shares of BIDU have dipped 24.7% in the past year.
The Zacks Consensus Estimate for Analog Devices' third-quarter fiscal 2022 earnings has been revised upward by 5 cents to $2.42 per share over the past 30 days. For fiscal 2022, earnings estimates have moved 16 cents north to $9.24 per share in the past 30 days.
Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of ADI have decreased 6.8% in the past year.
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Is Avnet (AVT) Worth Buying Amid Current Market Uncertainties?
Avnet (AVT - Free Report) is one of the stocks investors should currently add to their portfolio to shrug off highly volatile market conditions and benefit from its upside potential.
From the start of 2022, Wall Street has been witnessing high volatility due to several ongoing economic tensions, such as the outbreak of new COVID-19 variants, skyrocketing crude oil prices, rising inflationary pressure and a shift in Fed’s policy to a tougher-than-expected line. Moreover, the ongoing Russia-Ukraine conflict remains a key concern among potential investors.
Such geopolitical uncertainties are likely to continue to weigh on investors’ sentiments, which might eventually bring higher volatility to the U.S. equity market. Year to date (“YTD”), the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 have plunged 13.6%, 27.5% and 18.2%, respectively.
In such a scenario, growth-rated stocks like Avnet can boost one’s portfolio. AVT’s price trend reflects that the stock has an impressive run on the bourse YTD. Shares of the company have climbed 12.4% against the Zacks Electronics – Parts Distribution industry, which dropped 4.1% YTD.
Image Source: Zacks Investment Research
Why Is AVT an Attractive Pick?
Attractive Valuation: Avnet currently trades at an attractive valuation multiple. The stock trades at a one-year forward price-to-earnings multiple of 6.65X compared with its five-year average of 11.29X.
Solid Rank & Growth Score: Avnet currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities to investors. Thus, the company appears to be a compelling investment proposition at the moment.
Positive Earnings Surprise History: AVT has an impressive earnings surprise history. The company outpaced estimates in the trailing four quarters, delivering an average earnings surprise of 21.2%.
Strong Earnings Growth Potential: The Zacks Consensus Estimate of $6.83 per share for fiscal 2022 earnings suggests year-over-year growth of approximately 152%. The consensus mark for fiscal 2023 earnings indicates a 2.2% year-over-year surge and is pegged at $6.98 per share. Moreover, the long-term expected earnings growth rate for the stock is pegged at 37.2%.
Robust Fundamental Growth Drivers: Avnet is benefiting from the robust demand for its products in the communication and defense market. The company intends to focus on high-growth businesses only and divest low-profit or loss-making businesses.
Per the market research firm, Gartner, worldwide IT spending is anticipated at $4.4 trillion in 2022, suggesting an increase of 4% from 2021. It forecasts that worldwide spending on IT services will be up 6.8% year over year to $1.27 trillion this year. This is an upside for Avnet.
The company’s continued focus on boosting its IoT capabilities is helping it expand in newer markets and gain customers. On the IoT front, the company has made several partnerships with the likes of AT&T and acquisitions, such as Dragon Innovation, Premier Farnell and Hackster.io, to enhance its capabilities in this space. Per the company, such acquisitions have expanded its reach to more than two million customers and an active community of more than 750,000 entrepreneurs, makers and engineers.
Avnet expects to replace Texas Instruments revenues with higher-margin revenues by the end of fiscal 2022. Considering its growth prospects, it makes sense to invest for long-term gains.
Other Stocks to Consider
Some other top-ranked stocks from the broader Computer and Technology sector are Axcelis Technologies (ACLS - Free Report) , Baidu (BIDU - Free Report) and Analog Devices (ADI - Free Report) . While Axcelis and Baidu each sport a Zacks Rank #1, Analog Devices carries a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Axcelis’ second-quarter fiscal 2022 earnings has been revised 3 cents northward to 99 cents per share over the past 60 days. For 2022, earnings estimates have moved 10.3% north to $4.40 per share in the past 60 days.
Axcelis' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.5%. Shares of ACLS have soared 38.6% in the past year.
The Zacks Consensus Estimate for Baidu’s second-quarter 2022 earnings has been revised 31 cents southward to $1.38 per share over the past 30 days. For 2022, earnings estimates have moved 3 cents north to $8.27 per share in the past 30 days.
Baidu's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 52.9%. Shares of BIDU have dipped 24.7% in the past year.
The Zacks Consensus Estimate for Analog Devices' third-quarter fiscal 2022 earnings has been revised upward by 5 cents to $2.42 per share over the past 30 days. For fiscal 2022, earnings estimates have moved 16 cents north to $9.24 per share in the past 30 days.
Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of ADI have decreased 6.8% in the past year.