Skeeter,
<intc's business is in worse shape than 1996 >
This is quantitatively false. 1998 EPS will be about 22% above 1996. I know you don't think that this justifies the current price (which obviously is based on future expectations not the past), but let's not play loose with the facts. Even more important, is that your statement is qualitatively absurd. Intel's "business" has never been in better shape. Margins are on the rise, Q4 record earnings, back to back record revenues (Q3 and Q4), strongest pipeline of new products in the company's history, tremendous yields, recent products being announced ahead of schedule, success at the high end (i.e. server space) beyond all expectations, and trouble keeping up with Xeon demand through Q1. You call this "worse shape than 1996"?? You've gotta be kidding.
At any rate, you keep harping on the past. That's not how WS works. INTC is at a record high level precisely because WS believe that their prospects are better than ever. I happen to agree with that notion. If INTC doesn't meet 1999 expectations then the stock will come back down. This is exactly what happened when it hit 100 in the fall of 1997. When it became clear that they were not going to meet 1998 expections for the first part of the year the stock underperformed, declining from 100 to the mid 60's over a long period of time.
If you assume that INTC is not going to deliver in 1999 then yes it is overvalued now. But if you assume that they are going to meet expectations then it is not overvalued.
FF |
