Hence, we re-visited Altera stock target price based on PE ratio analysis with respect to the company Q4 outlook. The Q4 revenue is forecast to drop 4% sequentially (worst case). The EPS is estimated based on Net Profit Margin (NPM) of 21.8%. Thus, the revised target price is projected as $24.81, which is the center point of Avg PE (37.28) and Min PE (22.36) with the estimated yearly 2007 EPS of $0.83.
Here is the Deal:
This stock currently is traded at $18.81 as for 10/26. This trading price of $18.81 give a 25% of discount per the target price of $24.81. Thus, we recommend to BUY this stock at current trading price.
The Altera stock analysis spreadsheet can be obtained by clicking here.
Click here for reviewing previous Altera stock analysis on May 01, 2007.
3 comments:
Interesting chart to look AT for the altera stock performance from OCT to Nov each year.
Extracted from TheStreet on 11/28:
Altera (ALTR - Cramer's Take - Stockpickr - Rating) designs, manufactures and markets programmable logic devices, structured application-specific integrated circuits, predefined design building blocks and associated development tools. It has been downgraded to a hold from a buy.
The company is carrying no debt and maintains a quick ratio of 2.64, demonstrating the ability to cover short-term cash needs. Return on equity increased to 25.10% for the third quarter compared with 18.87% a year earlier, while net operating cash flow increased 17.34% to $128.45 million over the same period.
However, the company's third-quarter income fell 21.1% to $68.96 million from $87.42 million and earnings per share fell to 20 cents from 24 cents. Altera's stock price has fallen by 11.35% in the last 12 months, and the fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time. It had been rated a buy since December 2006.
Extracted from AP on 12/7/07:
Analyst Keeps 'Buy' Rating, $25 Price Target on Altera After Layoff News
NEW YORK (AP) -- An analyst kept his "Buy" rating and $25 price target on Altera Corp. after the programmable-chip maker said it was cutting 2 percent of its work force and taking $4 million to $6 million in restructuring charges.
Citi Investment Research analyst Glen Yeung said the layoffs could save the company about $10 million per year. The "fresh cost savings action," though, could hurt in the short term, so Yeung lowered his fourth-quarter earnings forecast to 16 cents per share from 17 cents.
San Jose, Calif.-based Altera also reaffirmed its fourth-quarter sales guidance, which Yeung said runs against recent Wall Street forecast cuts for that period.
"We look for the company to reaffirm double-digit long-term revenue growth," he said.
Shares closed Wednesday at $19.
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