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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (44418)	1/8/1998 12:07:00 PM
From: Paul Dieterich	Respond to of 186894

Lehman on Semiconductors in 1998: Today's Date : 01/07/98 ------------------------------------------------------------------------------ * 1998 SEMICONDUCTOR OUTLOOK - RATINGS SUMMARY RECAP AND EPS CALENDAR/ ESTIMATES VS. FIRST CALL CONSENSUS. ---------------------------------------------------------------------------- SUMMARY: EXPECT THE BROAD THEME FOR 1998 CHIP STOCKS TO BE A SHIFT TOWARDS RENEWED HIGH, LONG TERM GROWTH AND AWAY FROM TODAY'S FOCUS ON DECELERATION AND ASIA/PACIFIC. THAT SAID, HERE ARE THE UPS AND DOWNS WE ARE EXPECTING TO DELIVER 30% CHIP STOCK APPRECIATION IN 1998: 1) In early January, tax selling/window dressing ends; group goes up 0-20% (now complete), 2) Mid-January 4Q97 EPS reported at low end of consensus; group drops back 10% (any concern on U.S. growth will exacerbate setback); 3) February seasonal rebound in orders (plus cyclical strength from US expansion) resumes; group rises 30-50%; 4)April-June seasonal strength peaks; group begins 25% selloff; 5) September-December strength of DVD drives, internet appliances, digital imaging emerges, pushes industry sales up 15% for the year (particularly strong 4Q comparisons) and stocks rebound 25%. Overall 1998 gain: 30% (assuming modest growth in the broad averages).