Tuesday, October 2, 2012

Avnet: Deutsche Bank Upgrades To Buy After Recent Pullback

Deutsche Bank analyst Sherri Scribner this morning upgraded shares of Avnet (AVT) to Buy from Hold, while lifting her price target on the electronics distributor’s shares to $39, from $36.

“We see AVT as an operating margin leverage story, with higher margins driving EPS growth greater than sales growth,” she writes in a research note. “In our view, the recent pullback in the name offers a good buying opportunity, as valuation has become more attractive.”

She says the company’s pending acquisition of Bell Microproducts (BELM) should add 30-40 cents to her current FY 2011 EPS estimates; with BELM, she thinks the company can earn $3.60 in calendar 2011, giving the stock a multiple of just 11x.

AVT is up 24 cents, or 0.8%, to $30.07.

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