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Technology Stocks : Lucent Technologies (LU)
LU 2.890+2.5%Nov 10 3:59 PM EST
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To: Sawtooth who wrote (5586)1/17/1999 7:18:00 PM
From: lkj  Read Replies (3) of 21876
 
Assuming all goes well, Lucent may double its revenue in the next 3 years with improved profit margin in the low teens. The resulting earning would be between $7 to $8 billion dollars. A PE in the 30's might be reasonable. That yields to a market cap between $210 to $320 Billion dollars. The current combined LU/ASND market cap is $160 Billion. So we could see Lucent double in the next 3 years. But I think telecommunications growth will probably be higher in 3 years than now. Lucent may very well continue having a 50's PE. In this case, Lucent could triple in the next 3 years.

I guess the conclusion is that Lucent is not over priced. It should outperform the market in the next few years. Lucent may split soon, and the stock may run up to $100 quickly. If this happens too quickly, LU may be over stretched. So I hope that Lucent doesn't split until the second half of this year.
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