Celebrations may be in order for Avnet, Inc. (NASDAQ:AVT) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 5.3% over the past week, closing at US$82.40. Could this big upgrade push the stock even higher?

Following the upgrade, the most recent consensus for Avnet from its four analysts is for revenues of US$30b in 2027 which, if met, would be a substantial 22% increase on its sales over the past 12 months. Per-share earnings are expected to surge 156% to US$6.68. Previously, the analysts had been modelling revenues of US$27b and earnings per share (EPS) of US$5.69 in 2027. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 23% to US$81.50 per share.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Avnet's rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 1.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Avnet to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Avnet could be worth investigating further.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential flags with Avnet, including its declining profit margins. For more information, you can click through to our platform to learn more about this and the 3 other flags we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.