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Technology Stocks : LSI Corporation

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To: patrick tang who wrote (18196)	4/20/1999 10:02:00 PM
From: E_K_S	Read Replies (2) of 25814

Hi Patrick - What exactly are your quarterly estimates? Two years of positive growth say at 20% for Q1-Q4 and 25% for Q5-Q8: Also assume next quarter they can earn the $0.18 stated in the conference call.... Q2 $0.18 Q3 $0.22 estimate @ 20% Q4 $0.26 estimate @ 20% ------------------------------YEAR 2000-------------- Q5 $0.31 estimate @ 25% reflects ramp up of Sony Play Station ============================Total FY 2000 = $ 0.97 Q6 $0.39 estimate @ 25% Note: Free Flow Cash Flow will be very Q7 $0.49 estimate @ 25% positive and growing. Q8 $0.61 estimate @ 25% Q9 $0.76 estimate @ 25% ----------------------------Total FY 2001 = $2.25 at 25x PE price of stock should reach $56.25 The market will anticipate this future price based on continued positive earnings growth and how fast LSI can exceed the estimated growth rates. Based on the conference call, there is every reason that the above estimated earnings could be achieved faster, perhaps by end of Q1 2000. Current price at $36 reflects an expected annual earnings amount of $1.44. A $40 price yields a $1.80/annual and a $50 price expects a $2.00/annual rate. The question is how far and how fast can the earnings grow once we are on all cylinders? I would say two years or eight quarters may be optimistic but at current prices we still have a ways to go. My price target is $56-$60 by the end of January 2000. Also I bet it will fluctuate by $10 to the upside and down side over this period. EKS

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