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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 687.86

-0.4%

Dec 29 4:00 PM EST

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To: Haim R. Branisteanu who wrote (75160)	4/18/2001 4:44:56 AM
From: Arik T.G.	Read Replies (2) of 99985

I don't get it. INTC reported $6.68B sales and expects 6.2-6.8 in Q2, compared to $8.0B and $8.3B in 2000. Gross margin at 52% and expected 51% in Q2, compared to 62.6% and 60.4% respectively. AMD is conquering more turf- 21% market share in Q1. P-4 price cuts will inhibit improvement in margins in Q3. o.k. lets say business will improve in Q3 and Q4 and sales will grow 10% sequencial to $7.5B and $8.2B. At 51% gross, and with current SG&A that makes the operating income for Q3 $1.1B at most and $1.45B in Q4. Giving a VERY generous multiple of 20 on Q4 operating income gives a valuation of no more then $120B for the company. This IMO is very rich pricing, I just can't go higher then that. That's $17.7 a share. Now how in hell does INTC rise from 26 to 29 on the relief? Guess I'm just stupid, not seeing what everybody see. ATG

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