Goldman Sachs Lowers PT On AVT To $27.50

Goldman Sachs has slightly lowered its price target on Avnet AVT from $28.50 to $27.50 following the company's strong June quarter. According to Goldman Sachs, “Avnet's June quarter was relatively in line with Street estimates, while September quarter guidance was $200 mn light on sales and $0.09 on EPS. The guidance implies negative operating leverage as growth slows, with revenue 3% below Street expectations and EPS 9% below. The report confirmed the deterioration seen recently in the components market, with a book-to-bill below 1:1 in the quarter and through July. And, excluding the benefit of FX, revenue in systems dropped 4% yoy in EMEA (similar to the 2% decline at Ingram Micro in 2Q), highlighting very weak demand in that region. We reduce our estimates on lower sales and negative operating leverage, although the reduction is small as we had already reduced estimates as part of our coverage view downgrade earlier in the week.” Goldman Sachs remains at a Neutral rating on the stock. AVT closed yesterday at $25.52.