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This is great news for those of us long in the stock, but the market reaction was disappointing -- the stock is only back to the same low level it's been at the last few weeks. Do you know if Prudential gave any 12-month price target?
"The Stock Represents A Compelling Value At current prices, we believe AATT stock is an compelling value. With the stock trading at $12, our price target represents a potential 83% gain from current levels. The company's transition from the exposure to Intel is now in its last stages, and year-over-year topline comparisons we expect will turn positive starting in the third-quarter. The company has executed on this transition, has excellent market expansion opportunities, and is the low cost supplier in the market. Trading at just over 9 times our estimated 1999 earnings estimate of $1.23, we would be aggressive buyers of the stock. We are raising our rating to Strong Buy from Accumulate for AATT with a $22 12-month price target."
Wall Street is not responding favorably to yesterday's earnings announcement. However, the drop in sales from year to year must be tempered by the fact that AATT had a difficult transition to perform. The company was shifting from one main customer, Intel, to many customers, the computer manufacturers. IMHO, the company has done very well in completing that transition and is now favorably positioned for future quarters. In addition, the company's extremely low stock price has discounted the company's current slowdown. I think the stock price is also being hurt by the CEO's very cautious comments about future quarters. We shall see what happens in the conference call.