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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (67897)	5/17/2005 5:01:42 PM
From: GVTucker	Read Replies (1) \| Respond to of 77400

mindmeld, RE: Higher EPS with the same PE forecasts increases stock price forecasts by the analysts, which will put upward pressure on the stock price. From last week's Merrill Lynch Cisco research: "Our $22.75 price objective is based on 21x P/E multiple on CY06 estimated EPS of $1.09, excluding the impact of options expensing." [emphasis mine] Any change in Cisco's calculation of option expense won't change Merrill's price objective. From Morgan Stanley's report about the same time: "On absolute terms, we estimate a fair value for shares around $23 based on our DCF model and comparable trading multiples." Again, any change in options expensing calculations won't change their DCF model at all. I realize that Wall Street analysts have many flaws, but the average investor doesn't give them enough credit these days.