lostpros,Thanks for the analysis. I apologize for not responding sooner. Here are a couple of thoughts I had when I read your post.1) I think that your sales growth number is a little high. Fireman provided guidance of sales growth in the mid single digits for the year.( I think but am not positive that the extrapolation of 16% growth from a 4% quarter might also be a little off: The 4% growth number is based off of a comparison to last year's first quarter and the growth for each quarter is not additive. Growing 4% each quarter in comparison to last year's quarterwill only result in 4% total growth for the year.) 2) However, that being said Fireman did mention that earnings would grow about 15% so I think that you might be able to use a higher margin than you used.Here are the results if some of the assumptions are changed:Conservative Scenario:Assumptions:4% revenue growth for both 04 and 0510% earnings growth for 04 and 4% (in line with revenue growth) for 05 (Basically the margin stabilizes at 4.8%)60 million sharesP/E of 15Results:2004 Target Share price of 42.232005 Target share price of 44.96Moderate Scenario: 7% revenue growth for 04 and 5% for 0515% earnings growth for 04 and 5% (in line with revenue growth) for 0560 million sharesP/E of 15Results:2004 Target Share price of 45.202005 Target share price of 47.45Aggressive(Ok so maybe it isn't that aggressive) Scenario: 8% revenue growth for both 04 and 0515% earnings growth for 04 and 8% (in line with revenue growth) for 0560 million sharesP/E of 15Results:2004 Target Share price of 45.202005 Target share price of 48.81So after all of that it comes out close to what you had although I may have been too conservative. Based on today's closing price of 34.63 that would be a return of between 30%-41% over the next two years.Any thoughts on the above are welcome.Regards,gunsightpass
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