"Directionally at least, we think the economics of the business are increasingly going to work against Hewlett-Packard's current peak-printer margin levels and while time frames are fairly long term, margins are coming down," Goldman Sachs said.
He also looks at historical long-term margin trends to get a sense of where we are in the cycle.
Romaine doesn't expect AMD, after the spinoff of Spansion, to achieve its long-term margin targets in 2006 in fact, the analyst expects margins to contract.
Trian sent a 14-page letter to Cadbury's board on Tuesday urging Cadbury to cut costs, add several new directors and set near-term and long-term margin goals.
Meanwhile, on Tuesday, Peltzs Trian Management Fund sent candy maker Cadbury Schweppes ' board a 14-page letter urging Cadbury to cut costs, add several new directors and set near-term and long-term margin goals.
In a letter that Trian sent to Cadbury s board, the New York-based group urged Cadburys to cut costs, add several new directors, set near-term margin goals, and make long-term margin goals.
Using a discount rate of 8 percent and assuming that revenues increase in the long term at a 5 percent rate, they generate implied long-term margins, which they compare with analysts' medium-term forecasts.
Even including this recent advantage, the long-term margins of superiority achieved by these theoretically constructed back-tested portfolios are not large between 1% and 2% per year.
And that could harm long-term margins, and impair growth, two things that might ding valuations of private companies in the space.
