Joseph,
Here is the most probable bullish scenario, imo.(I hold amat, but expect to continue to buy to a potential low in the mid teens on a further panic due to too much money in the hands of manic depressives.)
AMAT's orders do slow significantly in the next 6 months due to asia, but the backlog keeps earnings around .50 per share, each of the next two quarters.
Orders pick up in the summer timeframe from asia.In the meanwhile, from the eu order growth is strong thru the year, while orders from us picks up after June, as INTC regains momentum along with other big semi's(soxx index is getting killed currently).DRAM oversupply is expected to be gone by end of 1998.
In the fall, Japan's economic stimulus package finally takes hold. Growth hits 5%.
AMAT's stock trades in a range btween 25-40 until May when it becomes clear that asia has stabilized and backlog starts growing again. Earnings for year come to .50,.50,.40,.40= 1.80. Next year is then expected to accelerate to .50,.54.,.60,.70=2.35.
Stock hits 45 in Oct98. Stock hits pricey levels in 1999 up to 75, but acceleration continues into 2000 as amat approaches a quarter of 1.00 and a share price of 100.
A million things can go wrong.
Gene |
