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Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: Chisy who wrote (10702)	3/2/2000 12:45:00 PM
From: John Miz	Read Replies (1) \| Respond to of 11555

Prudential....Hot off the press. For what it's worth. IDTI: Raising Price Target to $47 from $38 We believe there currently is a disconnect between the market's perception of IDTI and what we believe should be a more realistic market valuation. We believe the Company is still hampered by the investment community's legacy memory of its Pentium clone business (which was sold off in September of 1999) and the lingering memory of the "old" Company's exposure to the commodity PC markets. Gross margins should improve from 48.2% in the December quarter to an estimated 50.8% in the March quarter as utilization of the Company's Oregon fabrication facility improves. We believe gross margins should approach 54-55% over the next 12 to 18 months as the transition from .35u to .18u process is completed at the Oregon fab. The Company is seeing strong demand across all its product areas -- with particular strength in the FIFO memories and multiport memories product lines -- which is being pulled by the strong demand in the broadband access switching market (gigabit ethernet, ATM, DSLAM). Given the strong improvement in gross margins, new OEM wins, accelerating EPS growth and accelerating sales, we are raising our price target to $47 per share. Our $47 price target implies a valuation of $4.6 billion, or a multiple of 4.6 times market capitalization to expected revenues for calendar 2001, which is more in line with typical communication-focused semiconductor companies.