Mr. Benjamin raised his 2001 EPS estimate to $1.75 with a new price target of $88.
Perhaps I wasn't clear, Mark. "Mr. Benjamin" is Keith E. Benjamin, CFA, (415)693-3285, of BancAmerica Robertson Stephens. He and an associate, Lauren Levitan, wrote the report I was commenting on and which I have in my hand. Actually, I have the 5/28 report and the 6/3 report which was just issued to reflect the split adjustments.
Let me be clear. The pre-split estimate for 2001 was $1.75. Adjusting for the split, it is now $0.88. Likewise, the "price target" for the stock (they don't give a time frame, so I suppose if it is there in 2001 they are still correct) WAS $88 PRE-SPLIT. Now it is $44.
Again, the 2001 estimate was raised on 5/28 at the same time that the '98 and '99 estimates were cut, but NONE were changed on 6/3 (or since). And the price target was raised on 5/28 (from $65 to $88 PRE-SPLIT), but NOT on 6/3 EXCEPT to adjust for the split. Gee, 11 days ago (and adjusting for the split), they thought this stock was worth $32.50.
The price target is now $44 yet they have the stock rated as a "buy". I'm not fluent in Streetspeak, but I think that roughly translates as "if you aren't paying close enough attention to realize that we think this stock won't go any high for the foreseeable future, buy it now so our clients can unload and when it doesn't go up from here don't come bitchin' to us 'cause we told you it was only worth $44."
Bob
PS: "BARS" stands for BancAmerica Robertson Stephens.
PPS: If you take out another $20 million for interest expense in 2001, still probably understating reality, BARS' estimate of 88 cents for that year becomes 55 cents resulting in a three year forward "PE" of 84. Considering that there sure isn't room for further margin improvement beyond their very generous assumptions for 2001 and sales growth that year is projected at only 20%, I'd say an 84 PE would be a tad rich even three years from now. Hell, give 'em a 40 PE three years out and they might be worth $22 THEN. Discount that back to today at just a market return of, say, 11% and you get less than $16 today (but is an 11% return enough for the risk?).
PPPS: BWDIK? |
