America On-Line: will it survive ...? Message Board

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Technology Stocks : America On-Line: will it survive ...?

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To: James F. Hopkins who wrote (3032)	5/6/1997 7:31:00 PM
From: Robert Giambrone	of 13594

From briefing.com <Aol valuation> > :AOL initially moved higher in response to posting Q3 earnings of $0.02, which was well ahead of street estimates and break even whisper number... However, stock couldn't hold on to gains as investors questioned valuations... Stock has had a good run in anticipation of better number as well... Should be noted that valuation's not a big concern for Lehman analyst who raised his FY98 earnings estimates from $0.85 to $1.00 and established a 12-mo target of 80... What the company has done to warrant a multiple of 80x projected earnings remains a mystery to us... By comparison, Microsoft trades at 31x estimated FY98 earnings... While we think MSFT's valuations are inflated, if forced to make an investment choice between MSFT at 31x estimated earnings and AOL at 80x (or at today's level of 50x), we wouldn't hesitate a second in picking MSFT... Computer Sciences' Q$ net of $0.97 beat the street estimates by 2 cents... Due to the better than expected report, Smith Barney upgraded the issue to outperform from neutral... For Briefing's outlook on the Computer Software industry, see Wednesday's update of the Sector Ratings page.

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