PHG 2Q 2010 EPS Write Up

DS Notes: GM 36.8% against my 36.5% for the year. Much like everything else, they beat, but murky global outlook leads to sell pressure on overweight name for most analysts. Estimates will. have come down a bit on this, but still a very strongly situated company. Emerging mkts offer robust opp. EBIT forecast expected to exceed 10% for the year and most analysts still in high singles. This leads to conservative 2bn EBIT and 1.3bn net income given uncertainty and single digit YOY sales growth. Or €1.40. (street at €1.53) while the macro environment has reduced my high hopes for more of an American consumer related recovery in the 2H of this year….I think this is still a good name to own. Given strong cash flow. 3% dividend. Exposure to emerging mkts consumer. Still looking for $35-36 USD(18-19x) by year end on 1.30 FX rate. (although I feel given macro uncertainty may be stuck in the $31-32 range) Still should be valued higher for leadership in lighting, various consumer end mkts. Solid hold. With new money I would buy anywhere below $31.