Applied Materials No-Politics Thread (AMAT) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Applied Materials No-Politics Thread (AMAT)

AMAT 220.28

-6.4%

Nov 20 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Pink Minion who wrote (2462)	8/16/2002 12:02:36 PM
From: Jeffrey D	Read Replies (1) of 25522

From Goldman Sucks...er...Sachs...from yesterday. Jeff << "After working these growth assumptions through our model, and placing a 25% discount to the average of the three previous peak multiples, Applied still has approximately 70% absolute upside over a 2.5 year period to $22. If the semiconductor cycle winds up being more robust (which we view as likely) or we don't get a valuation adjustment at the peak (we think we should have such an adjustment), then the upside is much more significant. We simply don't see how investors with 12-18 month time horizons can be ignoring this risk/reward and therefore believe a 20-25% rally in the group is possible as investors shift from underweight to weight or overweight positions in the semi equipment sector. We believe the absolute downside risk to AMAT is around $10/$11. AMAT troughed out at 2x book value in 1996 and 3x book in 1998. Applying an average of those two multiples to the current $4.60 book value yields an $11.50 trough price. If the stock were to trade back down to 1996 levels only, the stock could fall just under $10. Given downside to approximately $11 and upside to approximately $22, we believe 12-18 month investors should be quite comfortable with 70% possible upside and 15% downside. "

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next