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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: jad who wrote (10754)	7/26/2000 9:21:23 AM
From: Lynn	Respond to of 17183

Thread: Here are the highlight's from ML's Focus 1 report. For those of us who also hold shares of NTAP, it is mentioned at the end: 12 Month Price Objective: $105 Estimates (Dec) 1999A 2000E 2001E EPS: $0.53 $0.76 $1.00 P/E: 156.6x 109.2x 83.0x EPS Change (YoY): 43.4% 31.6% Consensus EPS: $0.76 $1.01 (First Call: 21-Jul-2000) Q3 EPS (Sep): $0.13 $0.19 Cash Flow/Share: $0.63 $0.83 $1.05 Price/Cash Flow: 131.7x 100.0x 79.0x Investment Highlights: We are placing EMC on Merrill Lynch’s Focus 1 list. After EMC’s stellar 2Q results and increasing revenue growth forecast, the intermediate-term outlook is strong. We reiterate our Buy rating with a $105 price objective, which is 105X our 2001 estimate. The PEG ratio is a bit over 2X on next year’s earnings, expensive but less than other franchise names such as Intel and Oracle. Fundamental Highlights: EMC’s long-term strategic advantage comes from a number of differentiates including: a well designed execution machine, investments in software and interoperability, an ability to reinvent itself, good partners, and a very strong brand. In the intermediate term EMC’s new products will drive strong sales ($8.8 billion in 2000) and 57.4% gross and 19.3% operating margins. In the long term, EMC will be positioning itself to take advantage of new storage architectures like 10 Gigabit Ethernet. However, it will have to watch out for disruption from NAS players like Network Appliance. [snip to end] Lynn