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Politics : Formerly About Advanced Micro Devices

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To: Joe NYC who wrote (119884)	7/10/2000 9:43:25 AM
From: milo_morai	Read Replies (1) of 1575619

Lehman ups AMD target to 110$ SL: Advanced Micro Devices: Great Q2 and Outlook; Raising Price Target to $110 07:30am EDT 10-Jul-00 Lehman Brothers (Niles, Daniel 415-274-5252) AMD Today`s Date: 07/10/00 Ticker: AMD Fiscal Year: 12/31 Price: 82 52wk Range: 97 - 16 Rank(New): 2 - Outperform Target(New): 110 Rank(Old): 2 - Outperform Target(Old): 100 ----------------------------------------------------------------------------- EPS 1999 2000 2001 %Change Act. Old New St.Est Old New St.Est 2000/2001 1Q -0.81 1.15E 1.15E 1.15A 1.00E 1.00E 1.07E - - -13 2Q -1.10 1.06E 1.06E 1.13E 0.96E 0.96E 1.10E - - -9 3Q -0.72 1.17E 1.17E 1.25E 1.06E 1.06E 1.21E - - -9 4Q 0.43 1.47E 1.47E 1.56E 1.18E 1.18E 1.41E 242 -20 ----------------------------------------------------------------------------- Yr. -2.21 4.85E 4.85E 5.13E 4.20E 4.20E 4.69E - - -13 P/E 16.9 19.5 ----------------------------------------------------------------------------- MARKET DATA FINANCIAL SUMMARY Shares OutStanding (MM) 171.9 Revenue (B) 4.8 Mkt Capitalization (B) 14.1 Five-Year EPS CAGR 20.0 % Dividend Yield - - Return On Equity (2000) - - Convertible Yes Current Book Value 14.4 Float 111.8 Debt To Capital - - % Disclosure(s) None ----------------------------------------------------------------------------- INVESTMENT HIGHLIGHTS : * We believe that AMD saw a strong finish to the quarter with q/q revenue growth better than our 2% forecast and strong bookings. Untaxed EPS should be above our $1.06 estimate and likely greater than the Q1 $1.15. We are raising our price target from $100 to $110. * We believe that though chipset availability limited upside available in the quarter that AMD shipped roughly the 1.8M Athlons forecast with total processor units of about 6.3M. We believe chipset production is ramping with 3.6M Athlons easily achieved in Q3 and 7.2M in Q4. * Flash is also seeing very strong demand. AMD remains booked out for more than a year with pricing remaining very firm. Increasing capacity should enable more than 10% q/q revenue growth for Q3 and Q4. * The tax rate will probably increase given the higher than expected profits. We believe that AMD saw a strong finish to the quarter with q/q revenue growth better than our 2% forecast. We believe that this was driven by slight upside to both our processor and flash revenue forecasts within the quarter despite capacity constraints in both areas. We believe that the slight upside in revenues has resulted in slightly better gross margins which should lead to untaxed EPS that is definitely above our $1.06 forecast and likely better than even the $1.15 reported in Q1.

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