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Advanced Micro Devices, Inc. Message Board

  • celicatoyota celicatoyota Apr 15, 2000 10:34 AM Flag

    My analysis on AMD price target

    AMD earnings:
    Earning Estimate
    Last
    Quater: 0.47 vs -0.03
    This Quater 1.16 vs
    0.56

    Good factors for AMD:
    1)Jan- Mar is the worst
    quater of a year.
    2)Manufacturing efficiency
    improves
    3)New products are coming faster than its
    rival
    4)German plant is going to go production.
    5)A small
    market share it has currently.

    The worst
    case:
    AMD is to earn the same for all three coming quaters
    (since this past quater is traditionally the weakest
    quater of a year).
    $1.16x4 =4.64

    A
    conservative case:
    AMD grows its business in a rate similar
    to Intel as each of coming three demanding-strong
    quaters. I put $0.05 as quaters get
    stronger.
    $1.16+1.21+1.26+1.30 = $4.94

    Good Case:
    Production
    efficiency improves give it another $0.05 bump, now the
    annual earning is to be:
    $5.24

    Strong
    case:
    It gains market share of the chip market of, say, 5%
    (easily, right?). It earning will increase at least
    $1.
    $6.24

    A semicond company command at least 20 PE and could
    be as high as 100.

    For 20 PE:
    Worst:
    $100
    best: $130

    For 40 PE
    Worst: $200
    Best:
    $260

    My conclusion is that AMD price target ranges from
    $100 to $260 (and I think this is conservative).
    It
    eats market share of, say, 5% from Intel which gives