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Biotech / Medical : VISX -- Ignore unavailable to you. Want to Upgrade?

To: JEFF A. KEHL who wrote (407)	3/6/1998 9:28:00 PM
From: Amy Feller	Read Replies (1) \| Respond to of 1754

It took a call to my broker.. but here's why we had such a stupendous day! (any typos are mine) got this faxed to me this morning: (FIRST CALL) PWJC: VISX INC: STRONG INCREASES IN LVC PROCEDURES 9:33am EST 6-mar-98 PaineWebber (Charles Olsziewski 612-371-4157) VISX ROAD TRIP: STRONG INCREASES IN LVC PROCEDURES MAY WELL PRODUCE BETTER THAN EXPECTED Q1 EPS PERFORMANCE. KEY POINTS 1. We just completed a three-day institutional road trip with Mark Logan, the chairman and CEO of VISX. It has become increasingly clear that rapid growth in laser vision correction (LVC) procedures (from 195,000 in 1997 to 350,000 this year) will drive sharp bottom-line gains in 1998 and beyond. 2. While we look for 1998 earnings to rise more than 50% year over year, the bottom line increases should, we believe, exceed 100% in the first half of the year. In fact, the LVC procedure growth being reported by the company's largest customers would suggest that the March quarter could be tracking ahead of plan. 3. VISX has recently filed for the dissolution of Piller Point Partners. In a world without Piller Point, both companies would continue to collect a fee on the LVC procedures performed on their respective laser systems and ongoing legal costs would fall dramatically. 4. our rating on VISX remains a buy with a 12 month target price of $32-33 (see valuation below). 30% above it's recent closing. (Here they summarize what VISX is and what it's laser does) VALUATION Because of the explosive growth that the LVC industry is now enjoying and what we view to be extremely bullish prospects through at least the end of the decade, we continue to believe that VISX can grow its earnings at a 25%-30% secular rate. The stock currently trades at about 19 times our 1998 earnings estimate of $1.30 per share. We are in the midst of finalizing our 1999 forecast, which should be in the range of $1.55-$1.65 per share. Our rating on VISX remains a buy (1) for aggressive, risk-tolerant accounts with a 12 month target price of $32-$33 (25 times our 1998 estimate), about 30% above it's recent closing price.