Steve - the analysts are continuing to play the same game they have for at least a year - the 'prosperity is just around the corner' game. It goes as follows:
1) make outrageous profit projections for 3-6 months out, or next year
2) raise your ratings and price targets based on these looney estimates
3) As the quarter ends, silently lower your earnings estimates for the quarter (this Q's estimate has fallen from .72 to .63 in just the past few days - it was .98 3 months ago)
4) if MU fails to meet even the lowered estimates, wave your hands, tell the press that no one can predict MU's profits, and refocus the conversation on the prosperity you see 3-6 months out - how there's been an underinvestment in capacity, etc.
5) collect investment banking fees, trading profits, bonuses, etc.
Were it not for a confluence of one-time events (the Taiwan earthquake, combined with pre-Y2K hoarding) I think this game would be over. But for now, the bulls can keep looking back at Q1 and dreaming about how much MU may earn - someday... |
