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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (21079)	7/3/1998 9:54:00 PM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 70976

Brian: You gotta have sizzle to sell the steak and Lehman seems to be serving up its fair share. With respect to the 10B figure, Morgan has been selling this idea for quite a time. He says this will happen early next century. But in terms of a century, where does "early" come into play? 2010? Who knows and he is certainly not selling this idea as of late. Lehman says five years from now AMAT will be a 10B company. Where is the rationale? Without a rationale, it sure seems like a guess. During the past two FYs, I calculated that AMAT has had an after tax margin of 12.23% and 14.46%. If we take 13% and apply it to 10B, we are looking at $3.54 per share on 1997 shares outstanding. So in order to get to $7.00 per share, AMAT will have to double its after tax margins. Without knowing the underlying assumptions for this projection which are missing for this recommendation (i.e., increasing market share = increasing margins, increased chip demand = increased margins or one helluva buyback) it certainly seems far fetched. But it is sure nice to dream <g>.

To: Proud_Infidel who wrote (21079)	7/4/1998 12:33:00 AM
From: Gottfried	Read Replies (3) \| Respond to of 70976

Brian, from the "Outlook 1998--Capital Equipment" issue of Electronic News. Jan.5.1998 "In 1998, the continuing threat is that there will be a delay in Q1 in terms of orders and bookings from our customers," said Papken Der Torossian, chairman and CEO of Silicon Valley Group (SVG). "Because of 'Asian flu,' so to speak, (U.S. and European) customers will consider what to do. The (semiconductor equipment) industry will still grow 18-20 percent, but there will be a delay in Q1. Bookings in December (were) already slow." What will bring back the customers in Q2 is the requirement to press ahead with new semiconductor technology, produced on new semiconductor equipment--"They need it!" asserted Mr. Der Torossian. electronicnews.com Visibility was very poor 7 months ago when Mr Der Torossian thought growth would be 18% for 1998. What makes us think today's predictions of recovery not before 2H99 are not just as wrong? GM

To: Proud_Infidel who wrote (21079)	7/4/1998 10:21:00 AM
From: Sonki	Respond to of 70976

brian, u r right on the mony. 1.36('98) to 2.25(99) is 65% growth. even assuming that was true, and 25% growh after the first yr of 65 growth for the next 5 yrs would come to eps 5.37 * 25pe = $134.(2004) i think this is very optmistic. on the other hand current zack estimate for 98 and 99 implies 19% growth. so if u take 1.36(98) and give it a 19% compounding growh you you would get $3.23 * 19 pe will give u $61 price target by year 2004. this looks gloomy.. in either situations we don't get $7 eps. so i went back and read the msg again. ofcourse no where did it say this was a 5yr projection so yes, $7 is possible if you live long enuf for next amat peak!