Michael, thread, can anyone confirm it? CPQ = Strong Buy
by CSFB as per Yahoo! poster:
COMPAQ STRONG BUY
by: mariobon2000
10/12/00 2:00 pm
Msg: 188645 of 188646
Thu Oct 12 13:46:14 2000
(F.C. INTL) FJ: PC and Enterprise Hardware: Initiating
Industry Coverage FB
FJ: PC and Enterprise Hardware: Initiating Industry
Coverage FBC
01:46pm EDT 12-Oct-00 Credit Suisse First Boston
(McCarthy, Kevin (212) 538-38
CREDIT SUISSE FIRST BOSTON CORPORATION
Equity Research
Americas
U.S./PC and Enterprise Hardware
Kevin A. McCarthy 1-212-538-3809
kevin.a.mccarthy@csfb.com
Michael R. Walker 1-212-538-8919
michael.r.walker@csfb.com
Robert C. Semple 1-212-538-2828
robert.semple@csfb.com
PC and Enterprise Hardware (Initiating Coverage; Recent
Stock Declines Present
Buying Opportunity; Hardware Growth Driven by
Internet Infrastructure Buildout, Device PROLIFERATION)
Summary
We believe IT spending will increase at a double-digit annual
rate for the
next 3 years. Hardware spending will continue to comprise a
large portion of
total IT investment.
Computer servers and storage represent the core building
blocks of the
Internet Infrastructure. Increasing Internet commerce volume
and the
proliferation of access devices require greater enterprise
hardware capacity.
PC unit growth will moderate over the next two years as
desktop growth
declines. Total revenues available to PC suppliers will
increase, however,
due to an increasing mix of high-end servers, services, access
devices and set
-top boxes.
Hardware valuations have declined dramatically over the past
6 weeks. We
believe slight weakness in industry fundamentals is temporary
and stocks have
overreacted on the downside.
Investment Summary
We look for PC & Enterprise Hardware stocks to
outperform the market in 2001.
The beige box on a desktop will no longer define the PC
industry. PC
companies will more than offset slowing desktop revenues
with the
introduction of new Web appliance devices and associated
service revenue
streams. The inclusion of these new devices combined with
strong portable,
server and storage sales will lead to positive PC industry
revenue growth over
the next 2-3 years.
Worldwide IT spending is expected to post double-digit
growth over the next 3
years as consumer Internet usage and corporate e-commerce
activity proliferate
, increasing the need for greater server capacity as well as
new and more
flexible means of accessing the Internet. Declining component
costs coupled
with a richer revenue mix should allow improvement in profit
ratios for the
large, branded hardware suppliers. Hardware stocks
generally trade for less
than two times growth making them amongst the most
attractive vehicles in
which to play growth in Internet computing.
Recommendations
Our recommendations are as follows:
Table 1
PC and Enterprise Hardware
Coverage Universe
Company Symbol Rating Target Price
Apple Computer AAPL Buy $31.50
Compaq Computer CPQ Strong Buy $42.50
Dell Computer DELL Hold $32.50
Gateway GTW Strong Buy $70
IBM IBM Hold $137.50
Hewlett-Packard HWP Buy $115
Network Engines NENG Buy $50
Ingram Micro IM Hold $17.50
Tech Data TECD Hold $45
Themes |
