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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: hlpinout who wrote (71150)	11/6/1999 1:22:00 PM
From: Lynn	Respond to of 97611

From the ML report: Investment Highlights: · At 18x the consensus year 2000 EPS estimate, we believe shares are fairly valued. · We forecast year 2000 and 2001 EPS of $1.00 and $1.35, respectively. · Despite rich opportunity set, the stock's valuation could remain depressed until there is clear evidence of a turnaround. · Pace of change doesn't appear fast enough to attract investor interest in the near-term. · Assume coverage with Neutral/Accumulate. Fundamental Highlights: · Company continues to be hobbled by inferior manufacturing and distribution model. · We forecast overall revenue growth in the 11% range over the next couple of years. · We forecast PC and NT-based server revenue growth of 10% (25% unit growth and 12% AUP compression), high-end server revenue growth of 8%, storage growth of 18%, and services growth of 8%. · Anticipate improving gross margins and declining operating expense ratio owing to ongoing restructuring efforts.