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Technology Stocks : AT&T -- Ignore unavailable to you. Want to Upgrade?

To: Walcalla who wrote (3279)	2/16/2000 9:09:00 AM
From: deeno	Respond to of 4298

New recent opinion Price: $48 1/8 12 Month Price Objective: $70 Estimates (Dec) 1999A 2000E 2001E EPS * : $2.20 $2.15 $2.60 P/E: 21.9x 22.4x 18.5x EPS Change (YoY): -2.2% 24.3% 20.9% Cash Flow/Share: $3.68 $3.98 $4.52 Price/Cash Flow: 13.1x 12.1x 10.6x Dividend Rate: $0.88 $0.88 $0.88 Dividend Yield: 1.8% 1.8% 1.8% Operational earnings Opinion & Financial Data Investment Opinion: A-1-1-7 Mkt. Value / Shares Outstanding (mn): $157,080 / 3,264 Book Value/Share (Dec-1999): $12.05 Price/Book Ratio: 4.1x ROE 2000E Average: 20.9% LT Liability % of Capital: 45.4% Est. 5 Year EPS Growth: 12.0% Stock Data 52-Week Range: $41 1/2-$63 Symbol / Exchange: T / NYSE Options: Chicago Institutional Ownership-Spectrum: 39.3% ML Industry Weightings & Ratings* Strategy; Weighting Rel. to Mkt.: Income: Overweight (07-Mar-1995) Growth: Overweight (07-Mar-1995) Income & Growth: Overweight (07-Mar-1995) Capital Appreciation: Overweight (20-Jan-1999) Market Analysis; Technical Rating: Average (30-Aug-1999) **The views expressed are those of the macro department and do not necessarily coincide with those of the Fundamental analyst. For full investment opinion definitions, see footnotes. Investment Highlights: ú In our view, AT&T has positioned itself as one of only a few large, diversified global telecom services providers. ú Reinstating coverage with a Buy opinion and $70/share price objective. Further upside potential exists to our sum-of-the-parts valuation of $90. ú Given the diversity of the company?s business we advocate a move to a sum-of-the-parts valuation. ú Senior Management appears to be very focused on performance and value. Commitment to "execute" underwrites an attractive risk/ reward profile for the stock in our view. Fundamental Highlights: ú Improving revenue mix away from negative growth consumer voice toward high growth data, Internet, and mobility businesses. ú Cost cutting initiatives have been very successful; $2B more to come in ?00. ú With most of its significant (and dilutive) investments behind it, AT&T seems poised for accelerating earnings growth beginning in H2 ?00. We project 5 year revenue and EPS CAGR's (?99-?04) of 9.6% and 12.4% respectively.

To: Walcalla who wrote (3279)	2/16/2000 1:56:00 PM
From: Raptech	Read Replies (1) \| Respond to of 4298

It appears that T will slow down closing the Media One cable deal despite anticipated regulatory approval in April. The original deal was pegged to a T share price of $57 so if the closing was at current market share price T would have to come up with the difference in cash, about 3.7 billion today. The strategy would be that the tracking stock introduction will enhance T market value while the cable deal closing would be delayed until summer. Rap