Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 50.59

+4.9%

Feb 6 9:30 AM EST

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To: mauser96 who wrote (33560)	10/2/1997 1:10:00 PM
From: Barry A. Watzman	of 186894

>re: "The big run up in Intel in the last year came about largly because the P/E ratio got higher." This simply is not true. If Intel hits the consensus estimates for 3Q of $0.91, the trailing earnings for the past twelve months will have been exactly $4.00 ($8.00 pre split). I don't have the number for calendar 1996 in front of me, but it was substantially less. EARNINGS growth from full year 1996 to 1997 will have been in the 30% to 50% range. P/E ratio has NOT gone up. I will concede that it was up, briefly, but it has since come back down. With trailing earnings of $4.00 and a stock price of $93, the P/E is in the 23 range. This is still substantially below what you will see for both 1996 to 1997 growth rate AND the five-year average growth rate of 40% - 45%. A company with this kind of five year sustained growth selling at a P/E of 23 is still substantially undervalued. The P/E could go to 30 or 35 and it would still not be overvalued.

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