LE/Blount - Seagate Technology (STX - US$ 20.70) 1-Overweight
Change of Earnings Forecast
4Q06: STX Standalone Inline; MXO Blw Exp
Investment Conclusion
Seagate reported its first quarter of proforma
combined operations including Maxtor (Maxtor
contributed to 6 wks of qtr). STX June standalone
inline and MXO below expect. We believe STX
can continue to outperform due to EPS accretion
from MXO, large share buyback, internal
component sourcing, and component tightness.
Reit 1-OW PT-$31
Summary June qtr revs $2.5B (MXO contr $279M) vs cons
of $2.4B and standalone guid of $2.1-2.25B. Reported non-GAAP eps $0.27. Standalone, STX
eps $0.40 vs consensus $0.41& guid $0.42-$0.45. MXO came in lower than expctd in rev (desktop
share attrition) and profit. Approx half of MXO
EPS miss due to purchase accntng reval of inv.
STX guided for MXO GM of 0% but were -13%. Units of 33.6M vs est of 34.7M due to mxo Sept guid $2.65-$2.8B/$0.16-$0.20 (incl options)
blw cons. Updated FY07 guid to $11.8B-
$12.3B/$1.90-$2.00 from $11.8-12.3B/$2.06-$2.25
due to incr tax rate and underutilization.
Reduction almost entirely in Sep qtr due to
heightened FG inv, higher tax rate and transition.
Last 3 qtrs of FY07 largely unchanged except tax. Higher than expected $2.5B share authorization.
The June quarter was the first quarter of pro forma combined operations including six weeks of Maxtor contribution. June pro
forma revenues were $2.5 billion compared to consensus of $2.4 billion and standalone guidance of $2.1-2.25 billion (Seagate
standalone revenues were $2.25 billion while Maxtor’s contribution was $279 million). Standalone Seagate revenue came in
inline with expectations while standalone EPS were a few pennies light. However, Maxtor contributions were below
expectations. Proforma reported GAAP eps was $0.01 which included 1x acquisition related expenses and non-GAAP eps
was $0.27 including options. On a standalone basis, Seagate results were approximately $0.40 compared to consensus
estimates of $0.41 and standalone guidance of $0.42-$0.45 per share.
Management noted that original standalone guidance did not take into consideration the near-term dilutive effects of the
Maxtor acquisition nor the degree to which underutilization of equipment associated with the ramp down of MXO drives would
impact margins. The June quarter was affected by normal seasonal declines. Management also cited aggressive pricing
particularly in the low end desktop (80GB and below) as competitors tried to gain market share.
The principal swing factor in the June quarter was Maxtor which came in lower than expected in terms of revenue contribution
(likely due to market share attrition) as well as profitability. Maxtor contributed $279M to revenues in the quarter which was
lower than our expectations for MXO revenue contributions closer to $350-$390M. Maxtor saw some market share attrition,
particularly in low end desktop (which is typically a high volume product) due to unusually aggressive competitive pressures.
In addition, while Seagate had modeled for Maxtor related margins of 0%, Maxtor’s actual gross margins were -13% in the
quarter due primarily to purchase accounting which required Seagate to write-up MXO’s inventory from cost to estimated
purchase price. STX standalone margins were 23.4% while our estimates had called for margins of 24.4%. STX suggested
that the negative margin delta for the standalone business was related to lower than expected factory utilization (lower
absorption) a statement that is stated by the q/q build in finished goods inventory.
Seagate shipped a total of 33.6M drives in the September quarter which was below our estimate of 34.7M (due principally to
lower than expected shipments of MXO drives). The 33.6M total drives shipped consisted of 29.3M from Seagate and 4.3M
from Maxtor. Seagate proforma shipped 4.2M enterprise drives (inline with expectations), 20.1M desktop drives (below our
estimates due to aggressive competitor pricing of desktop drives), 3.4M notebook drives (slightly below our expectations), and
6.0M CE drives (better than expected in the June quarter). Management noted that the enterprise market was solid.
Figure 1: Proforma Units Shipments
SeagateMaxtor Fiscal
ProductsProductsQ42006
Consumer Electronics5.50.56.0
Mobile Computing3.4- 3.4
Enterprise Products40.34.2
Desktop Products16.53.620.1
Total29.34.333.7
Source: Company
*Note June quarter includes 6 weeks of Maxtor Acquisition
STX continues to target margins of 24-26% and reported lower than expec
original estimate of 21.9%. This was due in part to Maxtor’s margins whic
guidance for 0% in the June quarter.
Figure 2: Gross Margin Bridge (GM)
Reconciliation of GAAP and Non GAAP Gross Margin
GrossGross
Margin (%)
Margin ($M)
GAAP Gross Margin$45418%
Adjustments
Acquisition Related Charges$301.2%
0.2%
Non-Cash Stock Based Comp$6
$490
Non GAAP Gross Margin
Maxtor Product(12.9%)
Seagate Product23.4%
ource: Company Filings
anagement guided for revenues of $2.65-$2.8B and EPS $0.16-$0.20 in the Sept quarter which compares to consensus of
.87B/$0.38. (See figure 4 below for a bridge quantifying the factors impacting the change in EPS guidance from analyst day
present).
anagement stated that it has moved up the time table in completing the transition from production of Maxtor drives to
eagate designs by the end of calendar 2006. Last quarter, management had made a comment that a major gating factor in
drive production post acquisition close is the production of heads and wafers for the incremental drives from Maxtor.
According to the company, this is no longer a gating factor.
We are revising our Sept estimates to revenues of $2.73 billion and EPS of $0.17 ($0.20 excluding $0.03 per share of option
expense) from $2.84 billion and $0.39 ($0.43 excluding $0.04 per share of option expense). For FY07, our estimates go to
revenues of $12.1 billion and EPS of $1.90 ($2.04 excluding $0.14 per share option expense) from $12.1 billion and EPS of
$2.19 ($2.32 excluding $0.13 per share option expense). (See figure 4 below for a bridge quantifying the factors impacting
the change in EPS guidance from analyst day to present). Almost the entire estimate reduction for FY07 is related to the
September quarter. Principal factors negatively impacting EPS estimates are lower than expected factory utilization as STX
works down finished goods inventory and a higher expected tax rate (10% versus the original guidance of 5%) and, to a lesser
extent, more competitive desktop pricing environment.
Competitive environment. We continue to favor Seagate with a 1-Overweight and believe that the street is underestimating
the synergies from the Seagate/Maxtor merger that we believe will begin to manifest in the December 2006 quarter. We
believe Seagate is the best-positioned company to capitalize on the fastest growing segments – CE, notebooks and high-
capacity drives. The $2.5 billion share buyback (over the next 24 months largely funded through cash flow) is likely to reduce
outstanding market capitalization by approximately 20% and will provide investors with downside support/earnings accretion.
While short-term MXO dilution and long-term (competitive capacity) concerns remain, we believe STX can continue to
outperform due to EPS accretion from MXO, superior technology, internal component sourcing, favorable industry demand,
and component tightness. Management noted that the low end desktop hard disk drive pricing environment was challenging
given the propensity of competitors (likely Hitachi and Samsung) to cut prices in order to buy market share. Seagate was
focused on profitability in the June quarter and passed on a variety of hard drive deals as a result. Management noted that
going forward; it expects that the low end desktop pricing environment will remain aggressive. However, we note that
beginning in the December quarter the company should be better positioned to cost effectively compete as the Maxtor
desktop product line is transitioned to Seagate’s products.
Lateral impact on IT Hardware companies. In its September quarter outlook, Seagate indicated that it expected industry
consumer shipments and TAM to grow q/q as gaming companies prepare for the upcoming holiday season. Seagate expects
industry desktop TAM to grow 7-8% q/q, notebook TAM to grow 15-20% q/q and enterprise TAM to be flat to slightly down
sequentially. The solid projected September growth in notebook bodes well for Hewlett Packard and Dell. We would highlight
that notebook PCs typically generate better gross margins than desktop PCs. However, we would highlight that the continued
mix shift towards notebook away from desktop also negatively impacts Dell as the desktop is where Dell has its greatest
competitive advantage in terms of assembly and cost.
While STX expects desktop industry TAM to grow, we are currently modeling for desktop growth below the 7-8% q/q industry
growth due to share attrition and a larger base with the inclusion of Maxtor desktop drives. Seagate noted aggressive pricing
in the low end desktop market due to competitors who are taking share at the expense of profitability which we believe may
lead Seagate to experience below normal desktop seasonality in September. Our Lehman Brothers 3Q06 PC unit forecast
calls for industry desktop unit growth of 7% q/q and industry notebook growth of 14% q/q.
Hard Drive Enterprise Demand Solid
We would note that management stated that enterprise demand was solid in the June quarter which was as we had expected.
However, we would note that other vendors have made comments which suggest that enterprise demand may have slowed.
Dell preannounced July quarter results citing softness in the commercial markets, and EMC as well as IBM have both
observed elongated enterprise sales cycles.
Figure 3: Guidance and Lehman Estimates
FY 2007Jun-06Sep-06
ActualGuidanceLEH estCons. est.GuidLEH estCons. est.
Revenues$2.53B$2.65-$2.80B$2.73B$2.87B$11.8-12.3B$12.1B$12.0B
STX GM19.4%21-22%18.9%22.6%
MXO GM0%
OpEx$318$280$398$1.5-$1.6B$1,509
Tax Rate8%10%10%10%10%
Shares563610587.5613568.75
non GAAP EPS$0.27$0.16-$0.20$0.17$0.38$1.90-$2.00$1.90$2.12
GAAP EPS$0.01$0.04-$0.08$0.06$1.58-$1-68$1.60
September Guidance Lower than Consensus
September guidance for revenues of $2.65-$2.8 billion (including expected $400M revenue contribution from Maxtor) is lower
than consensus estimates of $2.87 billion. September quarter guidance for EPS of $0.16-$0.20 (includes stock option
expense) is also lower than consensus estimates of $0.38. Our Sept estimates go to revenues of $2.73 billion and EPS of
$0.17 from $2.84 billion and $0.39. For FY07, our estimates go to revenues of $12.1 billion and EPS of $1.90 from $12.1
billion and EPS of $2.19.
Going into the seasonally stronger half of the year, end market demand should be seasonally stronger which should tighten
component availability. Management expects that in the September quarter, the hard drive industry will see desktop unit
growth 7-8% q/q, notebook growth 15-20% q/q, enterprise flat to slightly down q/q, and growth in CE (as gaming
manufacturers begin to prepare for the upcoming holiday season). Our Lehman Brothers 3Q06 PC unit forecast calls for
industry desktop unit growth of 7% q/q and industry notebook growth of 14% q/q.
Seagate guided for higher non-GAAP proforma gross margins in the September quarter ranging from 21-22% compared to
gross margins at 19.4% in the June quarter. Furthermore, management guided for 100-150 bps improvement in December
quarter gross margins due to new cost optimized products and improvement in utilization of equipment. Management
believes that the company return to its historic 24%-26% gross margin range in the March 2007 quarter as the transition from
Maxtor platforms to Seagate platforms is completed.
Lowered FY07 EPS Guidance from Analyst Day Modeling Discussion
Management gave an update to FY07 guidance with revenues inline with expectations, but EPS below expectations.
Management stated FY07 guidance for revenues of $11.8-12.3B and non-GAAP EPS of $1.90-$2.00. FY07 GAAP EPS at
$1.58-$1.68. This compares to the modeling discussion at Analyst day of $11.8B-$12.3B in revenues/EPS ranging from
$2.06-$2.25. FY07 consensus numbers are currently $12.0B/$2.12. Furthermore, Seagate increased guidance for its FY07
tax rate to 10% from 5% at Analyst Day. The increased tax rate and greater than expected underutilization impact led to the
lowered EPS guidance for FY07. Seagate also lowered its estimated share count to 613M shares from 635M at Analyst Day
which helped FY07 EPS. However, this share count guidance excludes any benefit the $2.5 billion share buyback that the
company just authorized.
Figure 4: FY07 EPS Guidance Bridge
FY07 EPS Guidance BridgeLowHigh
Analyst Day Guidance$2.06$2.25
Underutilization & Other (-)$0.12$0.21
Sharecount (+)$0.07$0.08
Tax Rate (-)$0.11$0.12
-$0.16-$0.25
Updated EPS Guidance$1.90$2.00
Source: Company and Lehman
Product Lines
Management commented that overall industry TAM declined q/q due to normal seasonality.
Enterprise (3.5” and 2.5”SCSI and FC drives). Seagate pro forma shipped 4.2 million enterprise drive units in the June
quarter which consisted of 4.0M units from Seagate (14% q/q growth standalone) and 0.3M from Maxtor (6 week contribution).
We believe that Seagate’s standalone enterprise market share increased to 58% from 52.4% in the prior quarter. This implies
an industry enterprise TAM of approximately 7.0 million units (slightly up from the March quarter’s estimated TAM of 6.7
million units). Seagate gave guidance for September enterprise TAM to be flat to down slightly from June quarter levels.
Lateral implications: Seagate’s enterprise shipments suggest macro enterprise IT demand (servers/storage) remains solid,
and management made comments to the effect that enterprise demand is solid. However, we would note that data points
from other vendors have indicated that enterprise has been slowing. Dell’s negative preannouncement cited slowing demand
in the commercial market and Dell’s shorter sales cycles reflected the rapidness of the slowdown. IBM and EMC also had
mentioned elongated sales cycles on the enterprise side. This could have accounted for Seagate’s comments that enterprise
TAM in the September quarter would be flat or slightly down.
Desktops (3.5” computing applications). Seagate pro forma shipped 20.1M desktop drives in the quarter which consisted of
16.5M units from Seagate (-6% q/q decline for Seagate standalone) and 3.6M units from Maxtor (6 week contribution).
Seagate saw some low end desktop share attrition on the Maxtor side due to price competitiveness as competitors (possibly
Samsung and Hitachi) priced drives aggressively in order to take share. Western Digital and Hitachi likely picked up desktop
market share from Maxtor and Samsung also may have picked up share in the June quarter. Seagate is also concerned
about profitability and passed on deals in the quarter on the low end desktop due to insufficient margins (Maxtor’s desktop
products are not cost competitive and STX has not yet transitioned these products with its own). Our estimates suggest that
Seagate standalone market share in the quarter was roughly flat to slightly down from estimated market share of 30.4% in the
March quarter based on an assumed slight decline in desktop TAM q/q. Seagate estimates that total desktop TAM will
expand 7-8% q/q in the September quarter. The increases in TAM for desktop and mobile drives may be a positive indication
of demand for HP and Dell in the seasonally stronger September quarter.
Mobile (2.5” and 1.8” portable computing drives). Seagate shipped 3.4 million (-10% q/q) notebook drives in the quarter down
from 3.8 million in the March quarter. We believe STX’s notebook market share was also roughly flat at 16% share in the flat
from estimates of 16% share in the March quarter. Notebook TAM saw normal seasonal declines in the June quarter. In the
September quarter, management expects that mobile TAM will increase 15-20% q/q.
Consumer (3.5”, 2.5”, 1.8”, and 1” drives for PVRs, music players, etc). Seagate shipped approximately 6.0 million consumer
units in the quarter (5.5M from Seagate (17% q/q growth for Seagate standalone) and 0.5M from Maxtor). Seagate
standalone CE shipments comprised of ~400 thousand 1” units, 3.4 million DVRs and approximately 1.7 million gaming
(principally xBox) and other drives versus approximately ~700K, 2.5 million and 1.5M respectively in the March quarter. The
June standalone CE unit shipments of 5.5 million compared to the 4.7 million shipped in the March quarter. We estimate that
STX had 31% market share in the CE hard drive market in the June quarter compared to estimated share of 27% in the March
quarter. Seagate did not provide a specific estimate of their market share and TAM in the September quarter but suggested
CE TAM in the September quarter would increase from the June quarter (particularly gaming drives as gaming companies
ramp up for the holiday season).
Figure 5: Estimated Consumer Unit Breakdown (000s)
Sep-04Dec-04Mar-05Jun-05Sep-05Dec-05Mar-06Jun-06
1QA2QA3QA4QA1QA2QA3QA4QA
1" drives4001,5001,9002,3001,1001,000700400
DVRs1,0001,2001,2002,2202,2202,4002,5003,400
Other consumer1,5286681,0871,7026091301,4901,680
Total Consumer 2,9283,3684,1876,2223,9293,5304,6905,480
Source: Lehman Brothers and Company Filings
Figure 6: Financial Snapshot (June Quarter Proforma, Prior Quarters Seagate Standalone)
Sep-04Dec-04Mar-05Jun-05Sep-05Dec-05Mar-06Jun-06
1QA2QA3QA4QA1QA2QA3QA4QA
Seagate
Units21,63424,25424,94727,29526,83528,82029,45033,620
Revenues$1,558$1,847$1,969$2,179$2,088$2,300$2,289$2,529
Q/Q % change17%19%7%11%-4%10%0%10%
Gross Margin17%21%24%25%26%26%25%19%
Operating Margin3%8%12%13%13%13%13%7%
Net Income$40$144$227$271$288$313$306$169
EPS$0.08$0.29$0.45$0.53$0.53$0.58$0.55$0.27
Cash & equivalents$458$646$720$746$831$768$1,035$910
Accounts Receivable$826$879$988$1,094$1,116$1,091$1,152$1,445
% change20%6%12%11%2%-2%6%25%
DSOs48 days43 days46 days46 days49 days43 days46 days47 days
Inventory$379$362$412$431$477$505$549$891
Inventory Turns13.5x16.2x14.5x15.2x13.0x13.5x12.6x9.3x
Short-Term Debt$4$4$4$4$4$0$0$330
Long-Term Debt$739$738$738$736$736$192$400$332
Net Cash per Share-$0.58-$0.19-$0.04$0.01$0.18$1.14$1.22$0.44
Source: Company Reports and Lehman Brothers Estimates
Seagate Channel Inventories at ~5 Weeks but book inventories (principally finished goods) spiked.
Seagate ended the quarter with product channel inventory of 5 weeks but finished goods inventory spiked to higher levels
than we would like. The good news is that STX exhibited very strong discipline by not dumping the finished goods inventory
into the market further pressuring pricing. With a stronger seasonal quarter of demand in September, Seagate should be able
to work down the finished goods inventory in an orderly fashion.
Sales to OEMs accounted for 69% of revenues (4% lower than last quarter’s 73%) and sales through distributors accounted
for 28% of revenues (up from 24% last quarter). Retail mix was roughly flat at 3%. Total inventory exiting the quarter was
$891 million ($42M higher than the previous quarter) and inventory turns were 9.3x (due to the inclusion of Maxtor) compared
to Seagate standalone inventory turns of 12.6x in the March quarter. STX is targeting for inventory turns to return to 10x-12x.
We note that finished goods inventory increased $247M q/q to $556M. Finished goods inventory is comprised of $392 million
of Seagate FG and $164 million of Maxtor FG. Management explained that the increase in finished goods was due to
anticipated upsides that did not materialize and a mismatch in production (additional production of high capacity drives)
versus demand which led to a build in finished goods inventory. Assuming the majority of the inventory was at normal
desktop prices, it would suggest approximately 10 million units in finished goods inventory or approximately half of a quarter of
pro forma desktop shipments for the combined companies. This high level of finished goods inventory also explains why the
company expects to suffer from lower than expected factory utilization in the September quarter.
Margins Lower Than Expected Due to Underutilization and Aggressive Low End Desktop Industry Pricing
STX continues to target longer-term margins of 24-26% in FY08 as outlined at Analyst Day. Seagate reported lower than
expected pro forma margins of 19.4% in the June quarter versus our original estimate of 21.9%. In addition, Seagate
standalone margins were 23.4% and lower than our estimates of 24.4%. Maxtor likely saw some market share attrition,
particularly in low end desktop as competitors took the opportunity to try and take market share. In addition, while Seagate
had modeled for Maxtor related margins of 0% in the June quarter, Maxtor’s actual gross margins were approximately -13%
due to a purchase accounting convention that requires Seagate to write-up Maxtor’s finished goods inventory from cost to
sales price – said another way they had to effectively add a 13% gross margin to COGS. Seagate accelerated the integration
of Maxtor and accordingly underutilization costs associated with the ramp down of Maxtor costs became more pronounced in
the shorter time frame. As Seagate ramps down production of Maxtor drives the fixed costs associated with the machinery
still exist and thus the underutilization of machinery leads to lower margins. As soon as Seagate has completed ramped down
Maxtor produced drives, Seagate can write-off the cost of equipment and margins will return to normal levels. Seagate has
stated its goal of completing its Maxtor line to Seagate design transition by the end of calendar year 2006 which we believe is
achievable. Aggressive desktop pricing in the quarter also impacted margins.
Capital Expenditures and New $2.5B Share Repurchase Authorization
STX exited the quarter with $1.73 billion in cash and equivalents (net cash $1.90 per share). Seagate FY06 capital
expenditure spend was inline at $1B compared to management expectations of $1B in FY06. Management guided for capital
expenditures of $1.3B in FY07.
Seagate repurchased $400M worth of shares in the June quarter (16.7M shares). The Board of Directors approved a new
stock repurchase plan for a large $2.5B over the next two years which is higher than our most optimistic estimate of $2 billion
as well as what we had thought was a more likely estimate of $600-800 million. We believe that Seagate can fund the
majority of this buyback from cash on hand and cash flow. STX has approximately $1.7B of cash versus approximately
$300M of long-term debt. Further, we believe STX will generate approximately $1.25B of free cash flow (after capex and
dividends) over the next 24 months.
Second Half 2006 outlook
We continue to believe that the demand for hard disk drives will grow in excess of the PC and server market due to the
growing need for storage of digital media (e.g. videos, photos, mp3s). Seagate continues to have the lead in perpendicular
drives with a product for each end market (desktop, notebook, enterprise, consumer electronics).
While investors are rightly concerned about the demand outlook for PCs for the second half of 2006, due to slowing consumer
and enterprise data points and a potential stall in front of Microsoft Vista, we would point out that preliminary June quarter
results were exactly in line with historical (1995-present) seasonality. Further, since 1995, PC units on average grew 9% from
Jun-Sep and 17% from Sep-Dec. Even in the worst of years (bubble melt down, Y2K, etc), PC units were flat sequentially
from Jun-Sep and up 9% from Sep-Dec. It is our belief that actual PC units will come in below average seasonality but be
better than historical worst case. If so, then demand for HDD’s should be sufficient to keep supply-demand for components in
balance and keep the pricing environment from deteriorating further.
Figure 7: Median PC Seasonality
Median Seasonality (95-present) UNITS
Dec-Mar
Mar-Jun Jun-Sep Sep-Dec
Desktops
Average-11.4%-3.1%8.2%18.2%
Median-11.5%-3.3%8.8%18.0%
Max-7.8%3.3%13.3%24.4%
Min-14.4%-9.9%0.0%10.2%
Notebooks
Average-1.6%-1.0%11.9%12.5%
Median-1.8%-1.0%11.0%13.9%
Max7.5%4.3%20.1%16.3%
Min-6.8%-6.1%-0.3%3.2%
Overall
Average-9.6%-2.9%9.1%17.2%
Median-9.6%-3.0%9.8%17.3%
Max-7.5%3.1%14.8%22.7%
Min-11.7%-8.9%-0.1%8.8%
Source: IDC historical data, Lehman Brothers
We would point out that recent IDC data suggests that PC shipments grew 9.7% y/y in the June quarter versus our forecast of
9%. Further, Microsoft (2-EW covered by Israel Hernandez), which has historically taken a conservative view towards PC unit
forecasts, suggested that September PC units would grow 9%-11% y/y versus our 7% forecast. The latest IDC data suggests
that HPQ continues to grow faster than the market and Dell.
Figure 8: Lehman Brothers PC forecast
PC Units (excl x86) 1Q06A2Q06E3Q06E4Q06E1Q07E2Q07E3Q07E4Q07E 2005A 2006E2007E
Desktop33.2 31.6 34.0 38.6 34.6 32.9 35.8 41.0 135.9 137.4 144.3
Notebook18.2 18.3 21.0 24.0 22.9 21.8 24.6 27.8 65.3 81.5 97.1
Total Units51.4 49.9 54.9 62.7 57.4 54.7 60.4 68.8 201.3 218.9 241.4
Q/Q Change
Desktop-14%-5%7%14%-11%-5%9%14%
Notebook-9%1%14%15%-5%-5%13%13%
Total Units-12%-3%10%14%-8%-5%10%14%
Y/Y Change
Desktop4%0%0%0%4%4%5%6%9.1%1.1%5.0%
Notebook31%28%22%21%26%19%17%16%33.5%24.8%19.1%
Total Units12.4%9%7%7%12%10%10%10%16.0%8.8%10.2%
Desktop / Notebook Mix
Desktop65%63%62%62%60%60%59%60%68%63%60%
Notebook35%37%38%38%40%40%41%40%32%37%40%
Total Units100%100%100%100%100%100%100%100%100%100%100%
Source: Lehman (projected data), IDC (historical data)
Valuation. Our $31 price target is based on a 0.8x relative P/E multiple using our CY 2007 EPS estimate of $2.70 with the
2007 S&P 500 multiple of 14.0x.
|
