Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Jay Rommel who wrote (4087)	1/5/1999 11:14:00 AM
From: Larry Brew	Read Replies (1) \| Respond to of 4509

Jay, I found 80% of SAP is outside Europe business. If heavy in Asia, that may be the problem. On the contrary, PSFT has light Asia exposure and heavy Europe exposure. In the PSFT 10Q, they said a weakness in Europe could adversely affect earnings. PSFT may well be ok in spite of Sap performance. Larry

To: Jay Rommel who wrote (4087)	1/5/1999 11:17:00 AM
From: Grabs	Read Replies (1) \| Respond to of 4509

Here's text from a Salomon Bros. research report on SAP today: --SUMMARY:--SAP A.G.--Server & Enterprise Software SAP preannounced disappointing fourth quarter earnings. We are lowering earnings estimates and downgrading the stock to an Outperform from a Buy With the stock off about 30% (and more than 50% from its highs), we do not believe that it is prudent to go to a neutral rating as the company continues to gain market share from competitors and is truly the gorilla of its market. Although the next two quarters are likely to be challenging, we believe that the long term fundamentals remain in place and that longer term oriented investors will be rewarded by withstanding the near-term negative currents. Using a price/earnings multiple of 40 times our new estimate of $.80 in 2000 yields a price target of $32 per share (was $47). --EARNINGS:----------------------------------------------------------------- FYE 1 Qtr 2 Qtr 3 Qtr 4 Qtr Year Actual 12/97 EPS $0.05A $0.10A $0.08A $0.19A $0.41A Previous 12/98 EPS $0.08A $0.13A $0.10A $0.27E $0.57E Current 12/98 EPS $0.08A $0.13A $0.10A $0.19E $0.50E Previous 12/99 EPS $N/A $N/A $N/A $N/A $0.83E Current 12/99 EPS $N/A $N/A $N/A $N/A $0.65E Previous 12/00 EPS $N/A $N/A $N/A $N/A $N/A Current 12/00 EPS $N/A $N/A $N/A $N/A $0.80E Footnotes: EPS are fully diluted. --FUNDAMENTALS:------------------------------------------------------------- Current Rank........:2-H Price 01/04/99......:$34.56 Prior Rank..........:1-M Target Price........:$32.00 P/E 12/98...........:69.1X 52 Wk Price Range...:61.36 - 25.72 P/E 12/99...........:53.2X Proj. 5yr EPS Grth..:25.0% Return on Equity 97.:30.30% BookValue...........:$6.00 LT Debt-to-Capital..:.43% Dividend............:$.40 Revenue 1998........:$5046.90 mil Yield...............:1.1% Shares Outstanding..:1248.00 mil Convertible.........:No Mkt. Capitalization.:$43130.88 mil Hedge Clause(s).....:# Comments............: --OPINION:------------------------------------------------------------------ SAP preannounced disappointing fourth quarter earnings this morning. Downgrade to outperform 1) SAP preannounced disappointing fourth quarter earnings. We are lowering our earnings estimates and downgrading the stock to outperform 2) With the stock off about 30% (and more than 50% from its highs), we do not believe that it is prudent to go to a neutral rating as the company continues to gain market share from competitors and is truly the gorilla of its market. 3) Although the next two quarters are likely to be challenging, we believe that the long term fundamentals remain in place and that longer term oriented investors will be rewarded by withstanding the near-term negative currents. 4) Using a price/earnings multiple of 40 times our new estimate of $.80 in 2000 yields a price target of $32 per share.