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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (22884)	12/13/2000 7:25:21 PM
From: Ken W	Respond to of 29382

Sergio: EK down on downgrade, give me a break>> ROFL These "analysts" are getting to be a joke, period. Either they are 10 days late get it all wrong completely. Here is the "reason" that PRU downgraded MSFT today. Now who needs a break. This thing reads like someone posting on at Yahoo stock board. (no offense ICN) <GGGGG> We believe the demand environment for PCs may be changing rapidly, in some still unknown fashion, and that the result could prove negative for Microsoft. While we have relative comfort in our earnings estimate for Microsoft’s December quarter, we have greater concern in FY 2H’01 and FY’02 (June), and suspect the company may need to lower expectations. We are trimming our EPS estimate for FY 2Q’00 (December) to $0.48 from $0.49, for FY’01 to $1.89 from $1.91 and for FY’02 to $2.05 from $2.10. Perhaps more importantly, we are lowering our secular EPS growth estimate to 16% from 20%. Our concerns stem from new news regarding PC demand resulting from both a recently-completed Prudential Securities Asia Technology Tour and also from the possibility that Intel (INTC, $36 ½, rated ACCUMULATE by Hans Mosesmann) may freeze, and even reduce, its capital expenditures next year. The Asia Technology Tour targeted the participants in the personal computer supply chain in Taiwan, South Korea and Japan. Visited were foundries, assembly and test companies, contract manufacturers, chip companies and vertically integrated electronics OEMs. In other words, wherever inventories may accumulate. What was found was that notebook and desktop computer demand may be flat sequentially, or even see an industry-wide sequential decline of as great as 20%, in the December quarter. We believe either way this is unprecedented in the PC industry’s history. Ken