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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (102242)	4/12/2000 5:09:00 PM
From: GVTucker	Read Replies (1) \| Respond to of 186894

My guess would be overvalued.

To: Road Walker who wrote (102242)	4/12/2000 6:51:00 PM
From: Harry Landsiedel	Read Replies (1) \| Respond to of 186894

John Fowler. Re: So is Intel overvalued, fairly valued? I think the answer is, "That depends." And mostly it depends on Intel's future growth rate. The weighted average of 28 analysts is about 20%, with the low around 13% and the high at 26%. Interestingly, Intel's growth rate for the past 10 years has averaged around 30%, and its average PE has only been around 18. In the last five years the average PE has increased, but until 1999 it remained below the growth rate. If future earnings grow at a 25% rate and the average PE stays around 25 over the next five years, Intel will return about 19%, more than double your money at today's close. If Intel earns $2.91 in 2000 (the current consensus), it's fair value today is around $75 per share. However, if Intel's growth rate averages 20% going forward, it's not such a good bet. With an average PE of 20, your investment would grow by less than 10% over the next five years at best. With the lower growth rate, Intel's fair value today would be around $60 per share. Of course, Intel's growth rate could accelerate, with acquisitions and its new Internet focus. One of the wild cards in figuring Intel's growth rate, it seems to me, is their income from investments. That could play a key role going forward in bumping up the company's growth rate, earning the company a higher PE in the market place and raising your return. Truth to tell, I don't know the answer or have an educated opinion. However, two things are clear: 1) there is little doubt that Intel is at the very high end of its value range recently, which may explain some of the recent decline, and 2) it has never paid to underestimate Intel's ability to grow. HL

To: Road Walker who wrote (102242)	4/12/2000 10:59:00 PM
From: Amy J	Read Replies (4) \| Respond to of 186894

GV, John, Harry & Thread, RE: "So is Intel overvalued, fairly valued?" Hi, The market still looks a bit high to me when compared to previous years, yet, from the perspective of future earnings, consider: - a stock-split would show management's confidence in the price (this was mentioned on SI), - Craig Barrett's comments in an article posted on SI which said (off the top of my head) that demand will be good (or high? don't recall exactly) in 2000 and 2001. Now this is the interesting part: when has Intel ever (in the past 5 years) discussed their future demand as far out as > 1 year? Is this a first? - AMD's good earnings is one indicator on the semi industry - Japan & Asia's recovery etc. Things look good for a LT investor, although, the overall market may be a bit warm when compared to a few years ago. Harry, on your analysis, what do you conclude is a reasonable price if Intel achieves a growth rate of 35% in 2000, followed by say 35% in 2001? Then 25% in 2002, then 20% 2003? Just wild guesses here, but I bet Intel will be above 20% growth in 2000. I think the analysts could be wrong on their estimates for 2000, given Craig Barrett's recent comments in that article. Historical net income growth rates: 99 21% 98 -13% 97 35% 96 45% 95 56% 94 -.3% 93 115% 92 30% 91 (I haven't verified the figures above) Does anyone know where Paul is? Amy J