Arrow Electronics Inc.: Dell disengagement: likely limited impact; end market demand remains strong

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Arrow Electronics Inc.: Dell disengagement: likely limited impact; end market demand remains strong

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Arrow Electronics Inc.

Dell disengagement: likely limited impact;

end market demand remains strong

Reiterate Rating: NEUTRAL | PO: 233.00 USD | Price: 213.41 USD

We see minimal impact to earnings this year 01 July 2026

Recent media articles have highlighted Dell Technologies (ticker: DELL) potentially Equity

terminating its enterprise distribution agreement with Arrow’s ECS (Enterprise

Computing Solutions) group. ECS focuses on distributing higher margin data center Ruplu Bhattacharya Research Analyst

equipment (hardware and software) and the article mentioned that Dell wants to BofAS

increase distribution of client devices (PCs). We see limited disruption from this +1ruplu.bhattacharya@bofa.com646 855 0315

disengagement. In our opinion, the amount quoted in the media ($1.4bn) is likely an Wamsi Mohan

annual billings estimate. We would size the annual revenue impact to ARW at $600- Research Analyst

BofAS

700mn and annual EPS impact at $0.40-0.50. This represents about 2% of consensus +1 646 855 3854

EPS estimate of $21.60 for ARW for 2027. Also, we would expect a gradual wamsi.mohan@bofa.com

disengagement, likely over the remaining 2H of 2026. So, the impact to 2026 earnings Aisling Grueninger

Research Analyst

is even less. We leave our ests unchanged and look for any details related to this on the BofAS

next earnings call. Reiterate Neutral as improving industry fundamentals, channel +1 646 855 4273 aisling.grueninger@bofa.com

inventory normalization and early signs of margin stabilization are offset by macro

Ryan Seungin Choi

uncertainty, lingering regional mix pressures, and potential for lower demand in 2H26 Research Analyst