Example of Analyst hype......Again, here is the real story
Sue Billat of BancBoston has been hyping AMAT for weeks now, putting out many news articles and as a result, AMAT has been hitting new 52 week highs recently. If you read the articles below, you will see the real truth. This is a prime example of hyping for all semiconductor companies in this sector. Fundamentals have not change since October. The reality will set in and this sector will drop including Micron. Today's prices should be based on projected 1999 earnings, not 2000 or 2001. As in the case of Micron, it should be priced in the 20s.
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Applied Materials Inc. (AMAT) led the capital equipment group higher, up 2 5/8 at 42 11/16. BancBoston Robertson Stephens analyst Sue Billat forecast brighter days for the company in a recent research report.
Citing the semiconductor industry's move to new DRAM technologies, Billat introduced a fiscal 2000 earnings estimate of $2.26 a share, up from 66 cents in 1999. She also set a price target of $68 to $72 a share over the next 12 to 18 months.
"We believe that investors will soon, if they are not already, see past 1999 and instead factor in expected performance in 2000 in their assessment of semiconductor capital equipment companies," Billat said.
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Downsizing becoming routine way to boost performance
SAN JOSE (CBS.MW) -- Corporate downsizing has become routine business practice in bad times and good, the Los Angeles Times reported. At chip equipment maker Applied Materials (AMAT) in Santa Clara, 2000 employees, or about 15 percent of the workforce, lost their jobs in August. That came just three months after the company fired 1,500 workers. Some 91,500 job cuts were announced by U.S. companies in Octobers, the highest number in nearly three years. Experts say the pressure to downsize comes from Wall Street, where investors are relentlessly demanding better performance. (The Los Angeles Times)
Thursday November 19, 2:14 pm Eastern Time
Company Press Release
Semiconductor Equipment Orders Will Not Snap Back As In Past Cycles, Industry Analyst Predicts
SAN DIEGO--(BUSINESS WIRE)--Nov. 19, 1998--The semiconductor capital equipment industry will not bounce back until late 1999 and beyond, an industry analyst predicted recently at a technology stocks forum for individual investors in San Diego.
''Our forecast of bookings and billings going forward shows something unique compared to previous cycles,'' said Theodore O'Neill, semiconductor capital equipment analyst at Needham & Co. ''It does not show a rapid snap-back in terms of bookings as every other previous cycle has shown.
Companies such as industry stalwart Applied Materials (Nasdaq:AMAT - news) have reported large declines in revenue and net losses this year. O'Neill said Needham forecasts losses for virtually all the semi equipment companies in 1999, as ''front end'' makers see a slow ramp-up next year.
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