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Technology Stocks : EMC How high can it go?
EMC 29.050.0%Sep 15 5:00 PM EST
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To: SPSEIFERT who wrote (11941)1/24/2001 12:11:47 PM
From: hamsandwich  Read Replies (1) of 17183
 
Comments from Briefing.com regarding the NTAP downgrade and NAS dynamic with EMC:

Network Appliance (NTAP) 63 5/8 -9 15/16: The number one network-attached storage company is getting hammered today after a couple of downgrades from Goldman Sachs and Salomon Smith Barney. In fact, Goldman is dropping NTAP from its Recommended List to Market Outperform. They are concerned about softening demand in several key end markets and high valuation. Briefing.com adds the concern that EMC plans to aggressively go after the NAS market with some recent new product introductions. The concern with NTAP is becoming a common theme among IT hardware providers. While NTAP is expanding its exposure to new markets and gaining traction in existing ones, the gains should be offset by slowing spending by telecom companies and dot-coms for the near term. Some are concerned that forecasts for 2001 need to come down, however, an acceleration and upside are possible in 2002. On the valuation front, the company is pricey like many of the other storage stocks. First Call has NTAP expected to earn $0.58 in fiscal 2002 (ending April) so even with today's sell off, the stock is trading at a forward p/e of 110x whereas EMC is trading at a forward p/e of around 80x. We're not saying that EMC is cheap, our point is that both are richly valued. EMC (EMC 80 7/16 +7/8) is not fazed by the NTAP downgrades. Other storage plays are not being affected (QLGC is selling off for other reasons). See our recent Stock Brief on the Storage Sector. -- Robert J. Reid, Briefing.com
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