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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: SJS who wrote (7665)	9/13/1999 4:11:00 PM
From: VFD	Read Replies (2) \| Respond to of 17183

Subscribe to SmartMoney Magazine Now >> September 13, 1999 3:52 PM EMC Hits New High on Receding Y2K Fears By Monica Rivituso Y2K PROBLEMS? Fuggedaboudit! The millennium shadow hanging over EMC (EMC) stock appears to have dissipated. The big data-storage company hit a new 52-week high of 69 15/16 today after surging more than 2%. The stock has now regained all of the 30% it lost back in April when the Y2K slowdown story began circulating on Wall Street. Banc of America Securities analysts Paul Fox clearly missed the move back up -- having held onto his lukewarm Market Performer rating since April -- but he was one reason the stock moved forward today. He switched to a Buy rating this morning and boosted his 12-month price target to 90. What's changed? Fox says the threat of a Y2K-related lockdown in computer spending is passing, as is the damage wrought by new product offerings from such companies as Hewlett-Packard (HWP). Investors were also concerned about EMC's announcement that it intended to buy Data General (DGN). "We believe that over the next six to 12 months these issues will recede," Fox said in a report, "and that the promise of the EMC story and storage trends should be less affected by uncertainties." Since the beginning of the year, EMC stock has sold from anywhere between 40 to 70 times Fox's 1999 earnings forecast of $1 a share. But now, he says, the Internet boom offers data-storage opportunities so big that that Fox thinks growth should exceed previous forecasts. Not only is the boom in e-commerce providing demand, but so is the proliferation of dot-com companies of all types. Fox also sees growth potential for EMC's storage area networking and data storage software businesses. Fox even defended the acquisition of Data General, which should be completed by year's end. While EMC hasn't given the Street specific guidance yet, management has reportedly said it expects Data General to be additive to 2000 and 2001 earnings. Fox thinks Data General will broaden EMC's market opportunity by nearly 40% to $50 billion in 2001. The new company bolsters EMC's offerings in fiber-channel products and will allow EMC to play more aggressively in the NT market, which is the fastest-growing area in storage.