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Non-Tech : CORESTAFF (CSTF), now MMWW -- Ignore unavailable to you. Want to Upgrade?

To: limit who wrote (206)	12/1/1999 10:58:00 AM
From: Glenn Petersen	Read Replies (2) \| Respond to of 257

I had been thinking that MMWW might peak out at $33 to $35 prior to the XPDR IPO, but after this morning's run up I am beginning to think that my original estimate might be too low. I pulled this off of the Yahoo thread and have no way of confirming it: 09:10am EST 1-Dec-99 Gerard Klauer Mattison & Co. (Silber, J. 212-885-4063) Metamor Worldwide+ (MMWW)- On The Road Again!! Xpedior Deal progresses; Raising Target to $42 - BUY * Xpedior deal progressing ahead of our expectations. While not privy to final details, we believe the preparations for the Xpedior road show are in their final stages, with the potential IPO slated for mid-December, pending market conditions. We maintain our BUY rating. * Raising price target to $42 from $24. Roughly one month ago (when MMWW was at $18.63), we conservatively lowered our price target to $24 from $30. Since that time, two things have dramatically changed. For one, we are now significantly more confident in a timely Xpedior IPO, allowing the company to capitalize on current positive sector sentiment. In addition, the entire IT services sector has apparently rebounded as we think investors are looking beyond the negative near-term Y2K-lockdown impact and valuing the group on more normalized post-Y2K earnings. Therefore, we believe a higher price target is now justified. * Amended S-1 filing raises initial IPO range; we believe even this new range may be conservative. Last week's amended S-1 raised Xpedior's potential IPO range by $1 to $14-$16 from $13-$15. As such, the deal would be valued at roughly 3.4x our 2000 revenue estimate of approximately $215 million. As the peer group median of eBusiness consulting firms now trades at 12.5x 2000E revenues, we believe there is tremendous appreciation potential following the IPO. Our conservative estimate of 6x 2000E revenues being reached over the next 12 months yields a price target of $26 per share for this segment of the company. * IT services group falls back into favor, justifying a higher multiple for MMWW's core business. The IT services sector of our staffing and services index appreciate roughly 26% in November, despite some significant downward revisions to 2000 EPS estimates (the index was down nearly 35% over the 12 months ended November 30, 1999). As such, we believe MMWW's core business (2000E revenues of $545 million and EPS of $0.52) should be currently valued at 25x 2000E EPS, a still conservative discount to the peer group median of high 20's - low 30's times. Assuming that 2001 core business EPS grow at a 25% rate (which we think is low considering the expected slow start in 1Q00), and that our target multiple remains unchanged, this yields a 12-month pricetarget of $16 for this part of the company.