Yes, Merrill Lynch upgraded yesterday ASND. As I reported yesterday on the regular thread, Joe says one more tuff quarter and then smooth sailing. Here is his report:
ASCEND COMM.:Upgrading Intermediate Term Opinion to Accumulate [up from Neutral]
ACCUMULATE
[Near Term]
Long Term
ACCUMULATE
Reason for Report: Opinion Change
Price: $40 1/2
12 Month Price Objective: $45-50
Estimates (Dec) 1997A 1998E 1999E
EPS: $1.06 $1.15-1.25 $1.40-1.60 [he upped estimates]
P/E: 37.6x 33.2x 26.6x
EPS Change (YoY): 13.2% 25.0%
Consensus EPS: $1.18 $1.48
(First Call: 14-Apr-98)
Q1 EPS (Mar): $0.31 $0.28
Cash Flow/Share: $0.83 $0.92 $1.20
Price/Cash Flow: 48.0x 43.3x 33.2x
Dividend Rate: Nil Nil Nil
Dividend Yield: Nil Nil Nil
Opinion & Financial Data
Investment Opinion: C-3-2-9 to C-2-2-9 [see note at bottom for key]
Mkt. Value / Shares Outstanding (mn): $8,094.6 / 203
Book Value/Share (Apr-98): $5.19
Price/Book Ratio: 7.7x
ROE 1998E Average: NA
LT Liability % of Capital: 0.0%
Est. 5 Year EPS Growth: 30.0% [we are worth a bigger PE with this better growth rate]
Stock Data
52-Week Range: $60-$22
Symbol / Exchange: ASND / OTC
Options: Chicago
Institutional Ownership-Spectrum: 29.0%
Brokers Covering (First Call): 27
ML Industry Weightings & Ratings**
Strategy; Weighting Rel. to Mkt.:
Income: Underweight (07-Mar-95)
Growth: Overweight (07-Mar-95)
Income & Growth: Overweight (07-Mar-95)
Capital Appreciation: In Line (13-Jan-98)
Market Analysis; Technical Rating: Below Average (29-Dec-97)
**The views expressed are those of the macro department and do not necessarily coincide with those of the Fundamental analyst. For full investment opinion definitions, see footnotes.
Investment Highlights:
o We are upgrading the intermediate-term rating from Neutral to Accumulate based on the following investment considerations:
1. A recent contract with LCI International increases our confidence that the Core Systems business (Frame Relay and ATM switches) will achieve strong growth during the second half of 1998, and 1999.
2. After four consecutive quarters of a year-to-year decline in quarterly EPS, we are forecasting EPS growth of 50% in the September 1998 quarter to $0.30 versus $0.20.
3. We are increasing our 1999 EPS estimate from $1.35-1.45 to $1.40-1.60.
(ASND) The securities of the company are not listed but trade over-the-counter in the United States. In the US, retail sales and/or distribution of this report may be made only in states where these securities are exempt from registration or have been qualified for sale. MLPF&S or its affiliates usually make a market in the securities of this company.
Opinion Key (X-a-b-c): Investment Risk Rating(X): A - Low, B - Average, C - Above Average, D - High. Appreciation Potential Rating (a: Int. Term - 0-12 mo.; b: Long Term - >1 yr.): 1 - Buy, 2 - Accumulate, 3 - Neutral, 4 - Reduce, 5 - Sell, 6 - No Rating. Income Rating(c): 7 - Same/Higher, 8 - Same/Lower, 9 - No Cash Dividend.
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Joe Bellace was in print with the .26 EPS number ahead of the earnings were released for the Q1 in his forecast of the sectors EPS by player report. We maybe he is on to something.
Dennis |
