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Technology Stocks : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: Sigmund who wrote (4663)	4/19/1998 4:29:00 PM
From: Bleeker	Read Replies (1) \| Respond to of 14266

For the record, Lin's price target depends in part on 41 cents Q1 earnings. And I could live with his conservative P/E of around 23. The broker/dealer dynamics you mention are not specific to THQI but apply to the entire market. In the end, earnings growth has a funny way of revising price targets upward. That's what really counts. THQI appreciated more than $13 after the Wedbush Morgan downgrade last Fall. Its ascent was driven by earnings growth and a low P/E: one that is still significantly lower than the industry average. The interesting part about Lin's comments to me more than his upgrade was what he said about THQI's upcoming games, including Rugrats and Red Jack, but especially Bass Fishing and Brunswick Bowling. Equally important to me were his comments about the higher quality graphics of the upcoming games and how THQI is gaining wider recognition among high profile game programmers and developers. Lin actually said that in order to get to ERTS' P/E level (close to 40), THQI needs to have more polished games in the future. And he thinks it is doing that with Brunswick and Bass Fishing. That was one of the catalysts for the upgrade. Frankly, I'm more interested in his reasoning and what it means for for Q2 and Q3 earnings than the upgrade itself. If one of these games turns into a franchise title its effect will be much longer lasting than a downgrade or an upgrade. The market discounts those decisions in a single day. Bleeker