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Technology Stocks : Intel Corporation (INTC)
INTC 40.56+10.2%Nov 28 9:30 AM EST
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To: Amy J who wrote (73717)2/16/1999 3:53:00 AM
From: Michael Bakunin  Read Replies (1) of 186894
 
Not making my life easy, are you? Spreadsheets are fun as anything, though, so let's give it a shot. I'm assuming you mean 40% growth in 2000; I'd already accepted your $5/sh EPS estimate for '99. All other assumptions the same; please note that that includes 10% growth to infinity, which I find awfully optimistic: $146.

Note that dropping that optimistic infinite-growth number to 9% drops the present value to $109; leaving it at 10% but dropping each of your growth numbers by a flat 5% gives you $117 -- thus highlighting one of the shortcomings of the DDM, its extreme sensitivity to inputs, which are, of course, fraught with uncertainty in any case.

It all comes down to growth. INTC is so big we're really talking about market growth -- and I don't see quite that much. Thus, I suppose, are markets made.

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