Replies to post #778 on AMD strictly moderated (AMD)

[wbmw]

Re: How do you see a forward P/E of 20 as an "absurd level", given the projected rate of earnings growth?

Only the most optimistic AMD analyst on Wall Street rates them with an EPS of $2.00, which would give them a forward P/E of 20. And they do that by making broad assumptions about how much market share AMD is going to be able to take over the course of the year, and how high they are going to be able to maintain ASPs. Again, it's a rather optimistic scenario, but you can make a plausible story about the stock being justified, if that best case scenario ends up happening.

On the other hand, at least one analyst is expecting $0.35 EPS from AMD this year. Well, maybe they are just a bit pessimistic, but that would equate to a forward P/E of 115.