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Non-Tech : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: Spytrdr who wrote (3329)	7/20/1998 5:46:00 PM
From: jarvis henkle	Respond to of 13953

excerpt from Keith Benjamin's (BARS) web report: ------------------------------------------------ We raised our rating on ETrade this week to Strong Buy from Buy. We believe the company and the stock is at an inflection point, with an expectation of acceleration in marketing and account growth over the next few quarters. Our confidence in the ETrade brand was validated by Softbank's recent purchase of 27.2% of the company for $400 million. This will increase ETrade's cash balance to approximately $600 million, which could enable the company to invest heavily in marketing and technology going forward. Looking to Q2, which ETrade is expected to report on July 21, we expect trading volumes were volatile, but close to our estimates. While we believe there may be some downside to our trading estimates, there is probably upside from international licensing, from which we have not yet included any contribution in our model. While we believe R&D costs may be higher, we expect the bottom line to fall near our estimate. Looking to the September quarter, we would not be surprised if ETrade chose to focus primarily on franchise brand marketing and less on earnings. For the last few quarters, ETrade dramatically scaled back its marketing campaign to avoid the battle waged by Ameritrade, which has been marketing price as its primary benefit. Now that Ameritrade appears to have given up on this marketing strategy, the path seems clearer for ETrade to jump-start its advertising campaign, which will focus on its proprietary content, which we believe will prove a more compelling offering than just price. We believe the stock may react positively at the beginning of the marketing campaign over the next few months giving ETrade the benefit of the doubt. The risk in the stock appears that some investors may wait for proof. Our price target of $45 is based on a 30 multiple of our estimated 2001 EPS of $1.50. <eof> ---------------------------------------------------------------------- cheers, jarvis