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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: Tom_ who wrote (2679)	10/13/1998 11:02:00 PM
From: redwing	Read Replies (1) \| Respond to of 4509

Here is the story on PSFT from Merrill Lynch. Does anyone think this report has credibility? I tend to agree, it the news was really bad it would have come out a few weeks ago. Comments? MOTC: RESEARCH SUMMARIES:Intra-Day Special Calls; PSFT 11:20am EDT 13-Oct-98 Merrill Lynch (Investor Support) AMCALL PSFT SUMMARY ML++ML++ML Merrill Lynch Global Securities Research ML++ML++ML RESEARCH SUMMARIES Intra-Day Special Calls; PSFT Investor Support 13 October 1998 Peoplesoft (PSFT; $19 5/16; C-1-1 9) Dec98E$0.66 99E$0.90 o PSFT will not be speaking at a competitors conference at which it had been scheduled because it felt that the scheduled forum (a large breakout session)was not best suited, as the company is in its quiet period and it would give PSFT little control over the direction of the meeting. However, in our opinion, the company is not pre-announcing any disappointments for 98 3Q as we think if it were going to, it would have done so a week or two ago. PSFT will announce 98 3Q results on Oct. 20 after the market closes. o We think investors will perceive this news negatively and believe the shares will remain under pressure until the company reports next week. o We believe PSFT is the best-positioned enterprise application provider in terms of market focus, as it is focusing on the highest growth markets (non- manufacturing), and new technology cycles. o We believe the stock has corrected to levels which reflects an earnings shortfall and a much slower growth rate going forward. We believe the earnings outlook at the company is intact. PSFT shares are currently trading at 21x our 99E vs. our forecast of 35-40% earnings growth. o The company has a track record of conservative financial management and cautious financial outlooks. o PSFT has a new product cycle, Peoplesoft 7.5, which is ramping up this fall and is also expanding its opportunities in non-US markets. o Yesterday BAANF cited its difficulties lie in the US manufacturing arena, which is the slowest exposure for PSFT. o PSFT is focusing on non-manufacturing verticals, which we think are all high growth opportunities that can sustain a fairly robust earnings growth outlook for PSFT. o We maintain our Buy rating on PSFT shares and our 98 3Q forecast of $338mil in revenues and EPS of $0.17 vs. $0.11. (C. Shilakes) Merrill Lynch is currently acting as a financial advisor and will render a fairness opinion to Peoplesoft Inc. in connection with their proposed acquisition of all outstanding equity interest of Intrepid Systems Inc.,which was announced on June 4, 1998. Peoplesoft Inc. has agreed to pay a fee to Merrill Lynch for its financial advisory services, a significant portion of which is contingent upon the consummation of the proposed transaction. The proposed transaction is subject to approval by the shareholders of Intrepid Systems Inc.. This research report is not intended to (1) provide voting advice, (2) serve as an endorsement of the proposed transaction, or (3) result in the procurement,withholding, or revocation of a proxy.