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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: vmax who wrote (3195)	7/21/1998 11:09:00 PM
From: Frank mancuso	Respond to of 21876

From www.briefing.com LUCENT (LU) 102 5/8 +3/8: Telecom equipment giant is up 8% this week and 42% in the past month. Gains driven by expectations of another quarter of robust earnings growth. Lucent is due to report its results before tomorrow's open. Over the last five quarters the company has average year/year earnings growth of 122.8%. Street expecting company to post of Q2 gain of $0.27, or 63.6% above year ago period. Given Lucent's history of outperforming expectations, however, whisper number creeping up to the $0.30 to $0.32 area. Sales should be up big as telecom companies scurry to keep pace with surge in data traffic. Steady stream of major contract wins supports street's strong revenue outlook. Though we love this company and consider it to be the 90s version of Intel, from a short-term trading perspective we think the earnings news (to $0.32) is reflected in the stock. LU trades at 63x estimated FY98 earnings of $1.63. Consequently, unless company blows out its number and exceeds high end of whisper number, look for traders to use to report as an excuse to take some profits off the table in a classic buy the rumor, sell the fact trade. Distance from long-term moving averages also abnormally wide. First support is at 96 (gap), with a secondary floor at 88. Risk to the downside: company announces another stock split. Last split (2-for-1) occurred on 4/2/98.