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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Hoa Nguyen who wrote (123582)9/7/2000 5:08:54 PM
From: Road Walker  Read Replies (1) | Respond to of 1570939
 
Hoa,

re: I think one thing that's holding AMD down is the visibility over the next 2 years. From quicken.com, I see that the EPS estimate for 2001 is only 1.8% over 2000 (and until recently, it was negative). Why is this so? Is it because the analysts are just slow in updating their forecasts, or AMD is not issuing any guideline beyond this year, or is the figure in the right ball park?

I think you hit the nail on the head. Why are the estimates conservative? Because the analyst have no idea what will happen with AMD in 2001. The market pays for predictable results. AMD needs a track record, and as it achieves one, it's PE (and the estimates) will increase (though probably not explode).

John



To: Hoa Nguyen who wrote (123582)9/7/2000 5:39:37 PM
From: david_langston  Respond to of 1570939
 
Hoa,

only 1.8% over 2000 (and until recently, it was negative). Why is this so?

The conservative earnings growth estimates that the analysts are granting AMD are being "eaten up" by the increased tax rate in 2001 (from 20% to 31%).

Dave


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