Stock market today: S&P 500 extends monthly win streak despite Nvidia-led stumble
On Monday, Truist Securities maintained its Hold rating on Avnet (NASDAQ:AVT), with the price target remaining steady at $52.00. The decision follows Avnet's announcement earlier in the day regarding an increase in its quarterly dividend and an expansion of its share repurchase program.
Avnet has raised its quarterly dividend by 6% to $0.33 per share, up from the previous $0.31 per share. This new dividend is scheduled to be paid on September 25, 2024. Additionally, the company has boosted its share repurchase authorization to a total of $600 million.
Truist Securities updated its model to reflect these changes, which include the higher dividend and increased repurchase capacity. As a result of the adjustments, the forecasted earnings per share (EPS) for the calendar year 2025 have been slightly revised upward from $6.12 to $6.16, attributing this change to a somewhat reduced share count.
The price target for Avnet has been set at $52, which is based on 8.5 times the projected earnings, reflecting a historical discount of 12.5 times compared to the S&P index. Despite the positive developments regarding Avnet's dividend and share repurchase program, the firm's stance on the stock remains unchanged.
In other recent news, Avnet, Inc. has reported significant developments. The company exceeded its own expectations in the fiscal year 2024, achieving annual revenues of $23.8 billion and diluted earnings per share (EPS) of $5.43.
For the fourth quarter, Avnet's sales hit $5.6 billion with an adjusted operating margin of 3.5%. Despite a global sales decline in the Electronic Components business, Avnet managed to achieve cost reductions across all regions, positively impacting expenses.
In addition, Avnet has expanded its share repurchase program to $600 million, signaling an increased commitment to shareholder returns. The company also announced a 6% increase in its regular quarterly cash dividend, raising it to $0.33 per share.
InvestingPro Insights
Following the announcement of Avnet's increased dividend and expanded share repurchase program, current InvestingPro data offers a deeper financial perspective on the company. Avnet boasts a market capitalization of approximately $4.88 billion, with a trailing P/E ratio of 10.36, suggesting a potentially undervalued stock in comparison to industry peers. The company's price-to-book ratio stands at a modest 0.99, indicating that the stock may be trading at roughly its net asset value.
InvestingPro Tips highlight Avnet's commitment to shareholder returns, evidenced by its 11-year streak of raising dividends, coupled with an aggressive share buyback strategy. Additionally, the company's low price volatility could appeal to investors seeking stability. However, it's worth noting that analysts have revised their earnings expectations downwards for the upcoming period. For those interested in exploring further, there are 14 additional InvestingPro Tips available for Avnet, which can provide more nuanced investment insights.
With Avnet trading near its 52-week high and a dividend yield of 2.29%, the company's financial health appears robust, with liquid assets exceeding short-term obligations. These metrics and strategic moves by management could be key factors for investors to consider when evaluating Avnet's stock in light of Truist Securities' recent assessment.
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