YRC Worldwide Inc (YRCW)

[jenjenjoe]

$4 per share by y/e is very pumpy.

In its prime a few years ago YRC earned about $280 million which was close to $5 per share with 60 million shares outstanding and traded about 10x earnings.

YRC now has about 1.2 billion shares outstanding. To hit $4 per share we would require annual earnings of $0.40 per share assuming the same 10x earnings multiple. With 1.2 billion shares outstanding, that $0.40 per share earnings equates to earnings of $480 million, almost double their $280 million annual earnings in 2005/6.

This is a company that is still trying to negotiate itself out of potential bankruptcy and has a slim hope of showing a profit in Q3 2010. To justify $4 be end of this year they need a $100 million profit in Q3. No hope of that.

Now - that $20 per share in 24 months prediction??? That would require annual earnings of $2.4 BILLION!! Almost 10x more profit than they have ever shown. A $20 share price with today's 1.2 billion shares outstanding equates to $400 per share under its old share structure with 60 million shares outstanding. About the highest they ever hit was $60 per share.

IF YRC can get its costs under control we may see $4 in a couple years. I can see $1+ by year end based on expectations of strong future earnings.