Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Yougang Xiao who wrote (93025)	2/14/2000 7:05:00 PM
From: Charles R	of 1581750

<EPS FY Year P/E 1Q 2Q 3Q 4Q Actual 12/99 $ (2.18) N/A $(0.81) $(1.08) $(0.72) $0.43 Current 12/00 $ 1.90E 23.9X $0.41E $0.39E $0.46E $0.64E Prior 12/00 $ 1.00E 45.5X $0.23E $0.14E $0.24E $0.39E Current 12/01 $ 3.00E 15.2X Prior 12/01 $ 1.85E 24.6X> I really wonder what assumptions these guys use to get to lower EPS in Q1 compared to Q4 in the face of increasing revenues! <AMD Valuation We are raising our 2000 and 2001 EPS estimates to $1.90 and $3.00 from $1.00 and $1.85 respectively. Our revenue estimates are $4,100 million and $4,825 million in 2000 and 2001, up from $4,000 million and $4,750 million respectively. At 3.5 times book value (versus 9.3 times for its comps), 2.3 times sales (versus 8.7 times for its comps), and 15.2 times 2001 calendar EPS estimates (versus 31 times for its comps), we believe that AMD is a compelling value proposition. In fact, if you consider its flash business, which we estimate to be well in excess of a billion dollar business this year, AMD's current stock price is reflective of its flash business plus the value of its fabs alone. Assigning the stock a conservative 18.5 times 2001 EPS multiple (still a significant discount to the 31 times multiple other fabbed semiconductor companies enjoy), we arrive at our $56 price target based on our $3.00 2001 estimate.> Bravo! This guy finally had the guts to move to Accumulate from Hold.

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