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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: johnd who wrote (7408)	5/18/1998 10:39:00 AM
From: X-Ray Man	Read Replies (1) \| Respond to of 74651

Stock is selling lower because the market is adjusting EPS downward to take into account anticipated slowdown in earnings growth. There is no reason to assume that two quarters out the PE will still be 60. In fact, I would argue it is an either or situation. Either earnings decelerate, and EPS will adjust downward, so that MSFT continues in the 80-95 range for the next couple of quarters, or earnings continue at previous growth rate (contrary to MSFT statements), and with PE of 60, and 12 month trail in 2 quarters of better than 2.50, we would be at 150. Currently, I am more of a pessimist, and put more stock in the former scenario than the latter.