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Technology Stocks : Intel Corporation (INTC)
INTC 47.25+7.3%3:42 PM EST
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To: Proud_Infidel who wrote (137967)6/22/2001 2:52:11 PM
From: GVTucker  Read Replies (2) of 186894
 
Geez, I didn't think that calling 15% annual growth into question would generate this many objections.

Just look at it this way:

Let's say that Intel is actually able to generate net income at the high end of analysts estimates for 2001--64¢. Note that earnings this high is probably unlikely.

Then let's grow those earnings at 20% per year. 5 years hence, earnings will be $1.59/share.

Even in Intel performs with those optimistic assumptions, 15% annual stock price growth would result in a $56 stock, and a PE ratio in excess of 35. If you ignore the bubble of Nasdaq 5000, Intel didn't trade at such a level for the entire decade of the 90's.

While it could happen, probabilities argue against it. It has nothing to do with expecting a 5 year recession or the death of technology or any other such outlandish argument.
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