I find the whole article interesting and puzzling. With the potential upsides they have listed, I would rate the performance as a "blow away" quarter, yet they have very low expectations of the market's reaction.
<< Pramanick, for instance, thinks the company (AMAT: news, chart, profile) could have received gross orders of $1.5 billion or more in the quarter, representing a 34 percent quarter-over-quarter gain. Likewise, Lehman's White said he would not be surprised to see bookings of $1.4 billion for the quarter rather than his $1.25 billion official estimate and Cowen's Kant puts the prospective range for orders at $1.4 billion to $1.5 billion.>>
Also
<<The analysts are anticipating a favorable order outlook from the company with Pramanick predicting the company will forecast third-quarter orders up 15 to 20 percent or more quarter-over-quarter. "Also, we believe the company will be upbeat about its October quarter, as opposed to the current street view that the October quarter could be seasonally soft," he said. "We believe the company could exit the year at an order run rate of about $2.2 billion to $2.4 billion.">>
Then the puzzling part.
<<Meanwhile, Warburg's Walker also thinks the company will call for accelerating shipment and order growth, but he has valuation concerns.
"We think industry dynamics are pointing to an intense and brief upcycle, rather than a slow buildup to a robust 2004 and 2005," Walker wrote in a research note. "We therefore continue to limit our valuation horizon to achievable economic performance over the next 18 to 24 months, as opposed to optimistic 36- and 48-month projections.">>
And finally, what is he talking about?
<<Walker rates AMAT a "buy" with a $28.50 12-month price target.>>
There's a good chance to be at $28.50 in the next few days, and if that doesn't work, and they have a good year as estimated in the article, I would expect a much higher price.
Don |
