3Com Corporation (COMS) Message Board

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Technology Stocks : 3Com Corporation (COMS)

COMS 0.00130

-87.0%

Nov 7 9:30 AM EST

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To: hdl who wrote (45430)	10/25/2003 5:27:10 PM
From: Home-Run	Read Replies (1) of 45548

Lehman initiate coverage with a $8.5 target. Investment conclusion We are initiating coverage on 3Com with a 1-OW rating and $8.50 tgt. As an early pioneer in networking, 3Com has struggled in recent years due to lack of modular switching prod and macro IT spending environ. However, believe Huawei JV the key catalyst to turn 3Com around with competitive products at low prices (20-50% discount to Cisco) Summary 3Com is already shipping select JV products. Checks suggest full line of JV products GA by 2QCY04. Bel rev fr resales of JV prod could reach $50M for '04, $100M for '05. Bel 3Com’s GM off the JV prod mid 30s to mid 50s. Resellers appear enthusiastic re JV for better margins With its core biz stabilizing and sales of JV prod ramping, outlook seems encouraging. B/S solid, $1.5B cash (~$4/share) & no debt. Our $8.50 target is based on 3x 04 sales or 25x 04 op earnings N-term news flow likely constructive: partnerships with large system integrator, Pan-European disti, official JV launch in Nov, its first analyst mtg in recent years in January, etc. cbs.marketwatch.com; siteid=mktw

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