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Technology Stocks : Lattice Semiconductor

LSCC 63.14

-0.3%

Nov 5 3:59 PM EST

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To: Webb B Blackman Jr who wrote (145)	11/22/1996 11:36:00 AM
From: E_K_S	of 339

Hi Webb: Where did you hear that LSCC earnings were not going to rise next year? From an analyst of the Company? Margins for LSCC are increasing as they expand their sales of their high end FPGA devises (and they seem to be ahead of schedule from their stated business plan). This will basically impact earnings so even if sales do not grow as much, earnings certainly will. Look for overall margins to increase from mid 30% to low 50%. Next, from everything I have read from the company, they anticipate a compounded sales growth rate of 20% with earnings growing faster, perhaps in the 30%-35% range. New product development is good and we should see more announcements on next generation devises soon. Finally, industry growth should pick up next year (Q2 or Q3) as 1996 industry growth was slow for all companies. Lastly, as stated by one of my previous posts, a recent analyst raised his view on the company stating that the PE was "significantly" below the average for other similiar companies (ie. ALTR and XLYNX). The stock has rallied from a PE of 17 to about 21 and should continue futher to reflect a PE of 30 to 35. Check out XLYNX. It has a PE of over 30 and are estimated to earn much less than LSCC next year. IMO the analysts will begin to raise their 1997-1998 estimates for LSCC and stay constant on the 1997-1998 estimates for ALTR and XLYNX. My price target remains $55-$60 by Q3 or Q4 1997. EKS Perhaps you noticed the earnings estimates on http//www.smartstock.com for Lattice which do not reflect the correct 1997 estimates. I believe the estimates for 1997-1998 are around $2.65 - $2.85 and fiscal year 1996 will come in at $1.96 - $2.10.

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