Information Provided By:
Fly News Breaks for August 10, 2018
MCHP, ARW
Aug 10, 2018 | 14:13 EDT
Wells Fargo analyst Joe Quatrochi blames the weakness in Arrow Electronics (ARW) shares to comments made from Microchip (MCHP) that through the integration process of Microsemi it discovered what was deemed to be "aggressive shipping" to distributors and contract manufacturers and it is in the process of rightsizing inventory in the distribution channel. However, he would be a buyer of Arrow on weakness, as he thinks the size of inventory correction is relatively small across multiple distributors, largely took place in the June quarter, and should be reflected in Arrow's results and outlook already. Additionally, Quatrochi notes that Arrow has reported that no single supplier accounted for more than 7% of total revenue in 2017 and he thinks the combined companies still represent well under 7% of Arrow's revenue. He keeps an Outperform rating on Arrow shares, which are down 1.7% to $76.79 in afternoon trading.