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Technology Stocks : Texas Instruments - Good buy now or should we wait? -- Ignore unavailable to you. Want to Upgrade?

To: John Chen who wrote (2294)	12/2/1997 11:11:00 PM
From: jelrod3	Respond to of 6180

John, your guess of "mid 30's" is definitely supported by historical data. If one calculates normalized PE ratios over the last 6 years for TXN, it appears that the average is about 16. If (and that's a BIG IF) Kurlak is right, and TXN will have earnings in 1998 of $2.00 to $2.50, then this translates into an average stock price of $32 to $40 for 1998. If Kurlak is wrong, and the earnings estimates increase, you could see TXN trading on the high side of historical forward looking PE ratios of about 22x to 23x the increased earnings estimates. If earnings estimates are revised upwards to $2.75 for instance, the stock should trade in the range of $60 per share. If the market for DSP's is what TXN says it is, and if the DRAM curse does not drag the company down unduly, my guess is that you'll see TXN trade beyond $65 per share at some point in 1998.