Captain Jack...SSB analyst Richard Gardner...
For two years CPQ has been on the SSB approved
list with a target between $60-$65/shr.
Then they dropped it.
(exact same thing they did with MO...also 60-65 target)
"Given the potential Y2K impact and supply constraints
during the fourth quarter, as well as our assessment
that Compaq's commercial PC division will continue
to experience competitive pressures we are reducing
our 4Q revenue estimate from $11.1 billion to $10.0
billion and our 4Q ESP estimate to $0.21 from $0.15."
(Is it a mistake on the earnings? That's not a reduction)
"We are also reducing our fiscal 2000 revenue and earn-
ings estimates, based on our assessment that 1) the
continued consolidation of the corporate PC market
will cause increased competitive pressure and therefore
make it difficult for Compaq to catch up to the cost
leaders, and 2) the DEC and Tandem
platforms are likely to experience continued pressure
from formidable competitors like SUNW,
HWP, and IBM. Although we have given
Compaq full credit for its planned expense reductions
during fiscal 2000, our cautious revenue outlook effec-
tively lowers our fiscal 2000 EPS estimate from $1.14
to $1.00. We are reducing our price target from $25
to $20, but we believe that Y2K concerns, supply con-
straints, and higher competitive pressures in the
PC segment could ultimately push the stock into the
mid-teens. We reiterate our Neutral rating."
above from SSB
Loki |
