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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (622)	10/17/2001 12:08:57 PM
From: marginnayan	Respond to of 99280

12:04 ET Latest Anthrax Report : AP reports that the New York City office of Governor George Pataki has tested positive for anthrax spores

To: Zeev Hed who wrote (622)	10/17/2001 12:18:10 PM
From: marginnayan	Respond to of 99280

MSDW dated 10/17/2001 Intel (INTC-$25-O) Upgrade from Neutral to Outperform Mark Edelstone INTC reported C3Q01 EPS of $0.10 vs. $0.42 a year ago and $0.12 in C2Q. The results were in-line with our and the consensus estimates. However, we lower our C2001E and C2002E EPS from $0.48 and $0.60 to $0.46 and $0.50 to account for our belief that the weak economy and incremental pressure on consumer and IT spending caused by the attacks on 9/11 will result in weaker PC demand during the next couple of quarters. We initiate C2003E EPS of $0.85. Although in-line with overall expectations, we believe results showed some encouraging signs. Revenue of $6.5B (down 25% Y/Y, up 3% Q/Q) was 2% higher than our estimate. Although the Q/Q growth was less than the seasonal norm, it ended a 3-qtr streak of Q/Q lower revenue. Furthermore, the reported results were slightly higher than the updated guidance provided on 9/6. The Pentium 4 (P$) transition is the key issue and, in our view, it is now going well. P4 unit shipments quadrupled in C3Q to 6MM units. We estimate P4 accounted for 20% of overall unit shipments, and they started to exceed P3 volumes two weeks ago. INTC expects its P4 units to double in C4Q, and we expect them to represent more than 50% of overall unit shipments in C1H02. We upgrade INTC from a Neutral to an Outperform rating based on our belief that INTC's fundamentals and overall earnings power will improve next year. Despite the reduction in earnings estimates (largely expected and discounted for), we believe INTC has become increasingly attractive from an intermediate-term perspective. We have established a 12-month price target of $40, assuming that INTC should be able to trade at 7-8x C2003 year-end sales Rambus (RMBS-$12-N-V) Downgrade from Outperform-V to Neutral-V Mark Edelstone RMBS reported F4Q01 (Sept) revenue of $28MM (up 20% Y/Y, 4% Q/Q) and EPS of $0.06. The reported revenue was slightly ahead of our forecast of $27MM. EPS of $0.06 met our expectations and were ahead of the consensus estimate of $0.04. Royalty revenue of $25MM was 9% above our estimate of $23MM. Royalties increased 27% Q/Q due to the initial payment of the recently signed licensing agreement with Intel (INTC-$25-O). The additional royalties offset some of the weakness from declining memory royalty revenue as a result of the overall industry decline. Mgmt currently expects F1Q02 (Dec) revenue to decline 10-15% Q/Q due to declining DRAM prices. We believe DRAM pricing and end-market demand will likely remain under pressure over the next couple of qtrs. However, given that DRAM-based royalty revenue has declined to 25% (between $6-7MM) of overall royalty revenue in F4Q, we expect revenue and earnings stability to increase in the next several qtrs. We believe RMBS's proprietary technology is still unique and will continue to be adopted. RMBS will hold its annual developer's forum on Oct 22-23 with an analyst meeting on 10/22. We expect mgmt to unveil its long-term roadmap in memory and chip connection technologies. Mgmt may also provide an update on current design improvements on RDRAM and their adoption by manufacturers. Our F2002 estimates are largely unchanged. Since our upgrade in mid-Sept, RMBS has reached our price target of $12. Consequently, we downgrade RMBS from an Outperform-V to a Neutral-V rating. Over the next several qtrs, we would look for positive developments on the legal front, or a significant rebound of DRAM revenue, as reasons for upgrading the stock. However, since the prospect and timing for these are uncertain, we believe a Neutral rating is appropriate.

To: Zeev Hed who wrote (622)	10/17/2001 12:21:06 PM
From: JRI	Read Replies (1) \| Respond to of 99280

Any thoughts to this afternoon's action? Tomorrow? As is, we are set up for some nasty candles...and a simple move to 1680 or so seems too light...need to go lower, IMO.. that is, if these candles hold...

To: Zeev Hed who wrote (622)	10/17/2001 12:21:32 PM
From: Rich1	Read Replies (1) \| Respond to of 99280

Already out myself no profits..minor losses... Hate to be redundant but you said 1680 or so the bottom..

To: Zeev Hed who wrote (622)	10/17/2001 12:23:37 PM
From: marginnayan	Respond to of 99280

Techincal opinion on INTC by MSDW dated 10/17/2001 INTC took out the April lows and established a new support level near 18-19 in late Sept. A recent successful test of that level suggests the beginning of a stabilization. Very near-term the trend is up and extended with resistance near 25. We look for a pullback close to support where we would accumulate for a larger rally sometime during the early part of next year. Our first target would be resistance at 25, with a second target in the 28-29 area.