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Technology Stocks : Ascend Communications (ASND)

ASND 204.41

-1.0%

Nov 14 9:30 AM EST

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To: Darren who wrote (47724)	5/29/1998 12:51:00 AM
From: pat mudge	Read Replies (1) of 61433

Darren -- You quote a report issued on April 13. The following from Morgan Stanley Dean Witter was released on May 21, 1998. Rating: Outperform 52-week range: 60-22 Price: 47 Price Target: 55 Key Points: We have raised our 1998 estimate to $1.18 from $1.16 and our 1999 estimate to $1.50 from $1.45. Pricing pressure on the remote access side of the business has appeared to lessen. We believe Ascend's GBX 500 ATM switches continue to garner wins at the expense of its competitors. We are increasing our target price on Ascend to $55 per share, or 37X our new 1999 estimate. Our checks indicate the current quarter is on track to at least make the $0.28 estimate. New ATM and Frame Relay contracts are providing improved visibility, we believe. With easier second half revenue comparisons and improving operating margins, P/E expansion is likely. In our view, the shareholder base may change from value to momentum investors. >>> On May 19, 1998 UBS Securities issued the following: <<< Ascend Communications --- BUY Price: 44.25 Price Target: 50 Summary: Yesterday we wrote in a note that UUNet represented 20% of Ascend sales in 1Q98 as reported in its 10Q filing. This level seemed high given comments on the 1Q98 conference call, which suggested sales to UUNet were just north of 10%. Discussions with the company indicate that sales to the UUNet network were about 10%, which was the basis of the commentary on the conference call. An additional 10% of overall sales went to UUNet for wholesale applications where UUNet acts as a systems integrator. The purchase of equipment for wholesaling applications has been a trend for about two quarters. Business remains on track for Ascend. Maintain BUY with $50 target. . . . As mentioned in prior notes, we believe both the U.S. and International businesses will be up sequentially. We also currently estimate that RAC sales will be up around 2%, while Core Switching sales will be up around 14%. >>>>

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