CDW Corporation Set to Announce Earnings Amid Market Challenges
CDW Corporation (CDW), based in Vernon Hills, Illinois, is a major player in providing information technology (IT) solutions across the United States, the United Kingdom, and Canada. With a market capitalization of $24.4 billion, the company operates through its Corporate, Small Business, and Public segments. Investors are keenly awaiting the company’s Q4 earnings report, scheduled for release before market hours on Wednesday, Oct. 30.
Ahead of the announcement, analysts forecast that CDW will report earnings of $2.22 per share. This figure marks an 11.9% decrease compared to $2.52 per share from the same quarter last year. The company has struggled recently, missing Wall Street’s earnings expectations in three of the last four quarters, while achieving better-than-expected results on two occasions.
Future Earnings Outlook Shows Signs of Recovery
Looking ahead to fiscal 2024, analysts anticipate CDW’s adjusted earnings per share will be $8.99, reflecting a 5.8% decline from $9.54 reported in fiscal 2023. However, they predict a rebound in fiscal 2025, forecasting a 4.8% increase in EPS to $9.42.
Recent Performance Shows a Clear Disconnect with Market Trends
Over the past year, CDW’s shares have declined by 17.4%. This drop starkly contrasts with the S&P 500 Index’s ($SPX) impressive 22% gains, as well as the Technology Select Sector SPDR Fund’s (XLK) 18.2% returns during the same period.
Market Challenges and Earnings Report Impacts Stock Performance
CDW’s recent underperformance can be attributed to a lackluster U.S. IT market, characterized by stagnant growth and diminished demand from enterprise clients. These challenges, along with declines in operating and net income, broader economic uncertainties, and tighter IT budgets, have negatively affected how investors view the company. Following the announcement of its third-quarter results, where CDW reported an adjusted EPS of $2.63 and revenue of $5.5 billion—both below expectations—CDW’s stock fell by 11.3% on Oct. 30.
Analyst Ratings Offer Mixed Insights
Currently, the consensus opinion on CDW stock leans towards a “Moderate Buy”. Among the 12 analysts covering the stock, six have issued a “Strong Buy” recommendation, one has a “Moderate Buy,” and five analysts have suggested a “Hold” rating.
The average price target for CDW stands at $222.18, indicating a potential upside of 22.8% from current price levels.
On the date of publication,
Kritika Sarmah did not hold any positions, either directly or indirectly, in any of the securities mentioned in this article. All information and data are for informational purposes only. For more details, please refer to the Barchart Disclosure Policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
