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Technology Stocks : Creative Labs (CREAF)
CREAF 0.4700.0%Jan 9 9:30 AM EST
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To: David Beckett who wrote (6300)12/3/1997 11:03:00 AM
From: Sparkle  Read Replies (3) of 13925
 
This is my first post:

The Research Dept. of Merrill Lynch reported the following today:

INVESTMENT HIGHLIGHTS:
Channel sentiment in North Asia & Latin America has fallen sharply in recent weeks. North America and Europe remains satisfactory.
Although Dec. 97 sell-through could still spring positive surprises, we believe it prudent to reset expectations to a lower level. EPS estimates for FY99 lowerred from US$2.64 to US$2.50 and for FY99 from US$2.76 to US$2.59.
As Asia's macro-economic woes won't likely to go away soon, PER expansion in CY98 could be held back. We have therefore lowered our 12 month price objective from US$35 to US$30.

FUNDAMENTAL HIGHLIGHTS:
We have lowered expected revenue from Asia in FY98 from US$286m to US$214m and for FY99 from US$367m to US$297m.
Over CY98, Asia likely will remain a drag but could gradually be offset by increasing adoption rate of new generation products like PC-DVD.
Valuations still appear low relative to their potential. Too late to trade
out - look for buying levels instead.

As this report states expectations for earnings have been lowered and theybelieve that $30- per share can be achieved in 12 months and valuations still appear low. I was mindful of their last sentence "Too late to trade out - look for buying levels instead."

Best wishes,

Sparkle.
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