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Xilinx Inc

SAN JOSE, CALIFORNIA Xilinx Inc (XLNX) −
SEMICONDUCTOR, RELATED DEVIC MARKET VALUE ($MIL) SHARES OUTS (MIL): AVG DAILY VOL (000): $6,866 274 8,199 YIELD: P/E: BETA: Technology 2.6% 20.1X 0.96X June 13, 2010

Price: $25.07

OVERALL RATING

______________________________________________ Xilinx has a current Overall Rating of C (Neutral). This rating reflects mixed __ signals from PTR’s two proprietary measures of a stock’s attractiveness. Xilinx has a poor Appreciation Score of 31 but a good Power Rating of 71. The result is that the Power Rating very positively affects the Appreciation Score, producing the stronger Neutral rating. (See PTR RatingMap, and comments below). PTR believes that other higher−rated investments with at least as high a Power Rating ___ a and __ higher Appreciation Score are currently more attractive than Xilinx. (For more on PriceTarget Research’s Stock Ratings, see: http://pricetargetresearch.com/backtest.jsp .) APPRECIATION SCORE (POTENTIAL PRICE CHANGE TO TARGET) Xilinx’s Price Target of $25 represents a 0% change from its current price of $25.07. This low appreciation potential results in an appreciation score of 31 (69% of the universe has greater appreciation potential.) POWER RATING (LIKELIHOOD OF FAVORABLE PERFORMANCE) Xilinx has a Power Rating of 71. (This good Power Rating indicates that Xilinx has a better chance of achieving attractive investment performance over the near to intermediate term than all but 29% of companies in the universe.) Factors contributing to this good Power Rating include: the recent trend in Xilinx’s earnings estimates has been extremely favorable; recent price action has been favorable; and the Semiconductor, Related Devices comparison group is currently in a modestly favorable position.
(The Appreciation Score and Power Rating are percentile rankings relative to a universe of 8,000 companies. 0=lowest score; 100=highest. See last page for details.)
EARN SCALE

NEUTRAL RATING

C
Appreciation Score Power Rating

31
Power Rating 100

71
Positive Negative

PTR RatingMap,

W
50

C

0

0

50 100 Appreciation Score

Y

The Overall Rating is derived from a combination of the Appreciation Score and Power Rating.

$6.00

$5.00 $4.50 $4.00 $3.50 $3.00 V -$2.80 --$2.60 ------ - -- -----V --- --V - ---------- - ------- -$2.40 -- - - -- -- - --- - ----$2.20 - - --- - ------- -- -- ---------- -----$2.00 ------ -- - $1.80 - -- ------ $1.60 ---V $1.40 P P P P P P $1.20 P $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.45 $0.40 $0.35 $0.30 $0.28 $0.26 $0.24 $0.22 10X 75 50 25 75 50 25

V TARGETED STOCK PRICE O LATEST 4 QUARTER E.P.S. PRICE RELATIVE TO S&P 500

PRICE SCALE

$60 $50 $45 $40 $35 $30 $28 $26 $24 $22 $20 $18 $16 $14 $12 $10 $9 $8 $7 $6 $5.0 $4.5 $4.0 $3.5 $3.0 $2.8 $2.6 $2.4 $2.2

PRICE TARGET

$25
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P

P

P

P

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J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O 2007 2008 2009 2010
APPRECIATION SCORE
V

Target 03/11
75 50 25 75 50 25

31 71

POWER RATING

V

PriceTarget Research, Inc. (312) 553−0830 info@pricetargetresearch.com http://pricetargetresearch.com Copyright % 2010 PriceTarget Research, Inc.

153803100613019313

Equity Research

8% 14.0% 0. Xilinx Inc has moderate Growth characteristics −− its appeal is likely _ ________________________________________________________________________ to be to Capital Gain−oriented investors. risk tolerance. engages in the design. high P/E ratio. which customers program to perform desired logic functions. It offers advanced integrated circuits in the form of programmable logic devices (PLDs). customer training. 2 .000 company universe. development.866 0 10 20 30 40 50 60 70 80 90 100 Valuation Yield PE Ratio Price/Asset Ratio Growth Hist Growth Forecast Growth EPS Variability Profitability Hist ROE Forecast ROI Quality Beta Debt/Capital Financial Strength Market Value. predefined system functions as intellectual property (IP) cores.Xilinx Inc Investment Profile BUSINESS DESCRIPTION Xilinx.000 company universe) 153803100613019313 Copyright % 2010 PriceTarget Research. software design tools to program the PLDs. XLNX has low market capitalization.96X 14% 94 $6. SUITABILITY Xilinx’s "suitability" for an investor’s specific investment objectives is reflected in twelve investment variables that together define its investment profile relative to an 8.7% 11% 16. The company provides its solutions for electronic equipment manufacturers in end markets. scientific and medical.1X 3. The PLDs include field programmable gate arrays and complex programmable logic devices. XLNX is of high investment quality. consumer. 5 Xilinx’s valuation is high __ (moderate dividend yield. Inc. automotive. and field engineering and technical support solutions. ___________________________________________________________________________________________________ Relative to the S&P 500 Composite. and marketing of programmable logic solutions. and need for marketability/liquidity. Relative strengths include: high consensus forecast growth. $Mil (Universe Rank is Xilinx’s percentile rank relative to 8. audio. Inc. industrial. aerospace and defense.4% 19. and data processing.6% 20. XLNX Rank Relative to Universe (100=Highest) XLNX Value 2. These variables measure how well Xilinx aligns with an investor’s income orientation. and high price/book ratio) reflecting high investor expectations and carrying with it possible price risk if performance falls short. video and broadcast.90X 7. All factors are relative strengths. such as wired and wireless communications. and low earnings variability. design services.

0% is substantially below the consensus and in line with the average of the historical growth measures.50 O EARNINGS PER SHARE O O O O O O O $2.1% per year.00 $4.00 $15. variable _ decline between 2001 and 2009. __________________________________________________ PTR’s growth forecast is 5.5% 08 $2 ANNUAL GROWTH 2.50 $1.00 $4. INCOME STATEMENT $20.2% per year.7% −− substantially above the average of the historical growth measures. earnings growth has exceeded equity growth.00 $2.00 O O O O O O O O O O O O O O O O O O O O O O $10 $5 $4 $3 o GROWTH RATE $1. __________ _ PTR’s growth _ ______________________________ rate forecast of 5.00 $1.25 $1.75 $1.00 $45 $40 $35 $30 $25 $20 $15 $5.5% per year.00 $3.25 $2. Annual E.00 $0.5% 08 $2 00 01 02 03 04 05 06 07 *4 qtrs 09 10* to 3/10 00 01 02 03 04 05 06 07 *4 qtrs 09 10* to 3/10 CONSENSUS O 14% 12% 10% 8% 6% REVENUE O ASSETS O PTR O EQUITY O EARNINGS O $2.00 BALANCE SHEET $20.00 $0.75 $0.25 $0.75 $0. Four historical growth measures are examined for up to the last ten years.75 $1.00 $2 5. PTR’s growth rate forecast of 5.00 $1. Inc. Xilinx’s consensus growth rate forecast (average of Wall Street analysts) is 14. 3 . HISTORY CONSISTENT Xilinx’s __________________ consensus growth rate __ _________________________ forecast (average of Wall Street __ _______ analysts) is 14.50 $35 $30 $25 $20 $15 $10 COMMON EQUITY PER SHARE $35 $30 $25 $20 $15 $10 O $0. Forecasted growth suffered a dramatic. Xilinx’s historical income statement growth and balance sheet growth have diverged.S. The current forecast is significantly below the 2002 peak of 20%.15 $0.00 ANNUAL GROWTH 8.15 $5 $4 $3 O O O O O O O O O O O $5 $4 $3 4% 2% 0% O 00 01 02 03 04 05 ANNUAL GROWTH 11.2% 08 $2 06 07 *4 qtrs 09 10* to 3/10 00 01 02 03 04 05 06 07 *4 qtrs 09 10* to 3/10 PTR GROWTH FORECAST PTR’s growth forecast is the company’s longer term _______ intrinsic _ growth rate.25 $0.25 $2. "Balance Sheet" growth (growth in assets or equity per share) is typically the best measure of a company’s basic −− or intrinsic −− growth rate.50 $1. __ $5. Revenue growth has paralleled asset growth.7% −− substantially __ above the average of the historical growth measures. Consequently.1% 08 $1. it gives more weight to balance sheet growth than income statement growth and is importantly influenced by recent experience. FORECAST GROWTH 20% 18% 16% 14% 12% 10% 8% 6% 4% 5% 20% 18% 16% 14% 12% 10% 8% 6% 4% O O O O O O 06 O O 08 O 09 O 10 O 11 01 02 03 04 05 07 153803100613019313 Copyright % 2010 PriceTarget Research. HISTORICAL GROWTH AND CONSENSUS FORECAST There are no significant differences between Xilinx’s longer term growth and growth in recent years.5% per year. growth has been 11. Equity growth has been 2.00 $10.00 $5 $4 $3 ANNUAL GROWTH $10 REVENUE PER SHARE TOTAL ASSETS PER SHARE $45 $40 $35 $30 $25 $20 $15 FORECAST VS.0% −− in line with our recent _ ________ forecasts. Annual revenue growth has been 8.00 $15.00 $3.Xilinx Inc Forecast Growth PTR’s growth forecast for Xilinx begins with consideration of historical growth rates.00 $2.00 $10.P.25 $1. Total asset growth has been 5. Each growth measure is derived on a per share basis so that dilution from acquisitions or financing is reflected.0% is substantially _ __________________________ below the consensus and in line __ ___________________________ with the average of the historical _ ______________ growth measures.

0X 1. recent very sharp deceleration 05 06 07 08 09 0.4X 4% 4% V V V 1. profit margin.4X V V V V V V V V 0. 4 . The current forecast is well above the 2002 low of 8%. PTR’s return on equity forecast for Xilinx begins with consideration of trends in historical profitability and its components.5X 28% 24% 20% 16% 12% PRETAX MARGIN. ______________________________________________________ PTR’s return on equity forecast is 17.6X 8% 8% V V V V V V 2. recent small decline 05 06 07 08 09 4% 25% Strong overall uptrend 00 01 02 03 04 05 06 07 08 09 3% 25% Very strong overall uptrend. % After Tax/Pretax Income 200% 175% 150% 125% 100% 21% 18% 15% 12% 9% V RETURN ON EQUITY.0X 0. % Pretax Income/Revenue V V V V V V 28% 24% 20% 200% 175% 150% 125% TAX KEEP RATE.2X V 00 01 02 03 04 Very strong overall uptrend.5X V 6% 6% 1. O FORECAST ROE 18% COST OF CAPITAL 7. _ erratic increase between 2001 and 2009. _ V 0. pretax margin enjoyed a very strong overall uptrend although it experienced a small decline after the 2003 high. Inc. Return on equity is an extremely important measure of corporate operating performance and is of particular importance in understanding the wealth Xilinx’s investments generate for investors.Xilinx Inc Forecast Profitability HISTORICAL PROFITABILITY Businesses create wealth for shareholders by investing capital at a rate of return that is greater than the cost of capital.5X Strong overall uptrend 00 01 02 03 04 05 06 07 08 V 09 0. _______________________________________________________________________________________________ Xilinx’s return on equity has improved very significantly since 2000 even as it experienced a very sharp __ _________________________ decline after the 2007 high.2X Volatile overall uptrend 00 01 02 03 04 05 06 07 08 09 0. _____________________________________________________________________________________________________ _ The favorable trend in operating performance was driven by higher asset turnover and higher pretax margin.6X 2. These forecasts take recent trends in operating performance into account. Reinforcing this trend.5X 0. The key to the story for XLNX is a very strong positive trend in operations (pretax __ return) significantly augmented by a very strong positive trend in non−operating factors.4% 21% 18% 15% 12% 9% 6% 3% 0% O O O O O O O O O O O 21% 18% 15% 12% 9% 6% 3% 0% 01 02 03 04 05 06 07 08 09 10 11 153803100613019313 Copyright % 2010 PriceTarget Research.7% −− above our recent _ ________ forecasts. % V After Tax Income/Equity V 21% 18% 15% V 16% 100% 12% 75% V V 12% 9% V V V 50% V V V V V 75% 6% 50% 8% 8% V V 6% 4% V 00 01 02 03 04 Very strong overall uptrend.0X 0. _ The productivity of Xilinx’s assets rose over the full period: asset turnover has exhibited a volatile overall uptrend. Return on equity depends on return on assets as well as leverage effects.0X 1. Return on assets is a function of asset turnover. Forecasted return on equity enjoyed a dramatic. _______________________________________________________________________________________________ Non−operating factors (income taxes and financial leverage) had a very significant positive influence on __ ________________ return on equity. and the tax keep rate. recent very sharp decline 00 01 02 03 04 05 06 07 08 09 3% PTR PROFITABILITY FORECAST PTR’s return on equity forecast reflects current forecasts for earnings and common equity per share.

0 $3. _________________________________________________________ _ With future returns forecasted to be above the cost of capital. shareholder value is reduced.5 $4.) Notwithstanding this low Appreciation Score of 31. PTR expects XLNX to grow at a rate of 5. It is not a recommendation to buy or sell the stock. In addition. As explained previously. __ ___________________ growth in investment.50 $0. When expected return on equity _ cost of equity capital _ exceeds the cost of equity capital. 5 .25 $0. This view is consistent with the company’s most recent performance that reflected a growth rate of 6.60 $0.0 $2.13 $0.7% versus a cost of equity of 8.90 $0.12 $0. when returns fall below the cost of equity capital. this view is consistent with PTR’s forecasts.8 $2. EARN $3. (The Price Target is the result of a mathematical calculation performed on publicly available information. It may or may not be reached within the time period indicated or ever.7% versus a cost of equity of 7.20 $1.17 $0.6 $2.80 $0.0 $4.22 $0.00 $1.50 $1.25 $2. At Xilinx’s current price of $25.2 O O Y Y Y Y Y Y Y Y Y Y y O y Y O 98 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 13 20X 10 Xilinx’s Price Target is a proprietary estimate of warranted stock price at the end of the _______________ based on next fiscal year(s) __ proprietary discounted cash flow analysis.75 $1.50 $2.40 $1.20 $0.0% per year and to earn a return on equity of 17. PTR’s 2011 Price Target of $25 is based on these forecasts and reflects an estimated value of existing assets of $17 and a value of future investments of $8.10 $1.50 $3. Inc. and a return on equity of 10.15 $0.11 VALUATION Existing Assets $30 Future Investments $30 $25 $25 $8 $12 $17 $25 $25 $20 $20 $15 $15 $13 $10 $10 $5 $5 $0 $0 CURRENT PRICE 2011 TARGET V Price Target/Share O Earnings per Share V Y Book Value per Share Price Price Relative to S&P 500 PRICE & EQUITY $70 $60 $50 $45 $40 $35 O V V V V O V O V V O O V V O O oV V o $25 V $30 $28 $26 $24 $22 $20 $18 $16 $14 $12 $10 $9 $8 $7 $6 $5. new investments create value for shareholders.07.30 $0.00 $0. This low __ appreciation potential results in an appreciation score of 31 (69% of the universe has greater appreciation potential. the high Power Rating of 71 results in an Overall Rating of C.Xilinx Inc Price Target _______________________________________________________________________________________ Xilinx’s current Price Target of $25 represents a 0% change from the current price of $25. Xilinx’s Price Target is based on forecasts of the three key Value Drivers discussed above −− ______________ return on equity. Conversely.70 $0. and an appropriate __________________ for each period.0% per year.5 $3. _ ________________________________________________________ XLNX is expected to continue to be a modest Value Builder. The red diamonds show annual targets while the blue channel shows prior year values as well as current forecast.5%.) 153803100613019313 Copyright % 2010 PriceTarget Research.4 $2. __ Xilinx’s return on equity has improved very significantly since 2000 even as it experienced a very sharp decline after the 2007 high.35 $0.30 $1.40 $0.00 $2.45 $0. PTR believes that other higher−rated investments with at least as high a Power Rating ___ a higher Appreciation and __ Score are currently more attractive than Xilinx.14 $0.07.4%. investors are placing a positive value of $12 on its future investments.

Score __ _____________ __ Our rating methodology recognizes two realities. First. Stocks rated C (Neutral Rating and 40% of the universe) are anticipated to perform in line with the general market.Xilinx Inc Rating Methodology PriceTarget Research’s Overall Ratings −− quantitative ratings of relative attraction −− for 8. Integration of a disciplined stock valuation framework and consideration of current market dynamics yields important performance benefits. Inc.000 stocks are updated ______________ __ weekly. Second.50 = +81. ______________ Overall Rating. the and __ Appreciation Score acts as a "governor" on the Power Rating during periods of high investor enthusiasm and the Power Rating can signal caution when market attitudes are out of line with forecasts and the Appreciation Score. In the example: N N N N _____ Rating __ % of ____ Univ _ 15% 15% 40% 15% 15% Anticipated Future ___________ Performance __ Strongly Outperform Outperform Neutral Underperform Strongly Underperform P A P B P C P D P F (Highest Rating) (Positive) (Neutral) (Negative) (Lowest Rating) PRICE TARGET $115 V V -V ---.-. 6 . The Appreciation Score represents the degree __ to which a stock is attractively priced relative to the universe. By combining deep fundamentals ___ market factors. as fundamentally based and meaningful as the Price Target and resulting Appreciation Score are.----. Each company’s warranted market value −− or Price Target −− is derived from PTR forecasts of return on equity.--- $180 $170 $160 $150 $140 $130 $120 $110 $100 $90 $80 $70 $60 $50 $48 $46 $44 $42 $40 $38 $36 $34 $32 $30 PRICE SCALE Price Target is $115 Current Price is $63. and resulting in an unusually speculative investment. investment results are superior to results from companies where only the Appreciation Score or Power Rating is high (Cells 2 and 4). PTR’s proprietary research clearly demonstrates that when a stock’s high Appreciation Score is corroborated by a high Power Rating (a Cell 1 company). Those rated F (Lowest Rating) and D (Negative Rating) (15% each) are expected to under perform the general market and generally have lower Appreciation Scores and Power Ratings. __________________ Appreciation Score. The Overall Rating separates stocks selling below warranted value into those with the potential to get "less cheap" sooner (Cell 1) versus those with little likelihood of a significant price move over the near to intermediate term (Cell 2).1% Resulting Appreciation Score = 84 (%ile rank when compared to the universe) Copyright % 2010 PriceTarget Research. 100=highest). long term growth. the forecasts that support the Price Target and Appreciation Score need to be reviewed for reasonableness: N Cell 2 stocks may well have forecasts that are Low Low Power Rating High Appreciation Score High B Forecasts too High? A Confirm Attractive C Confirm Unattractive D Forecasts too Low? too optimistic. N Forecasts for Cell 4 stocks may be too pessimistic. "overshooting" warranted value. they can sometimes carry too far. as important as technical measures and the Power Rating can be for a company. and cost of capital. Stocks rated as A (Highest Rating) and B (Positive Rating) −− 15% of the universe in each case −− generally have high Appreciation Scores and high Power Ratings and are expected to outperform the general market over the following 12−24 months. In cases where the Power Rating and Appreciation Score don’t agree (Cells 2 and 4). PTR’s Overall Rating is a letter grade derived _ from the combination of the Appreciation Score and Power Rating. The percentage change from the stock’s current price to the Price Target is calculated and percentiled relative to the universe (0=the lowest appreciation potential.-.50 Appreciation Potential = $115 / $63. the underlying forecasts can be "off the mark" in some cases. These Overall Ratings combine a stock’s current appreciation potential as reflected in its Appreciation ___________ __ _____ and current market dynamics as measured by its Power Rating.

No PTR employee. or needs of individual clients. The first is how well the ratings discriminate between outperforming ___________ __ and underperforming stocks −− i. or affiliates. The second consideration is how ____________ this performance data is. We do not endeavor to update any changes to the information and opinions in this report. or advisory board member serves in a similar position for any covered company. persistent appraisal of relative attractiveness: the average duration of individual ratings exceeded 12 months. From this information. It does not take into account the particular investment objectives. The value of securities mentioned in this report and income from them may go up or down. In addition to the regular publication of its stock ratings. persistence of ratings is measured. INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. PTR hereby disclaims any liability for any inaccuracy or omission with respect to any information presented in this report. mathematical computations. Past performance is not a guide to future performance. Copyright % 2010 PriceTarget Research.com/backtest. have long or short positions or holdings in the securities or other related investments of companies mentioned herein. Well−ordered performance well−ordered __ occurs when A−rated stocks outperform B−rated stocks that. and a loss of original capital may occur. shall not have any liability to any party for any consequential. PRICETARGET RESEARCH SPECIFICALLY DISCLAIMS ALL WARRANTIES WITH RESPECT TO THIS REPORT. D. this performance was well−ordered and consistently superior from period to period: in most years. Neither PTR nor any of its employees owns shares equal to one percent or more of the company in this report. 7 . Inc. in turn. Finally.e. techniques and software developed by PTR. __________ __ each stock’s rating is recorded and the number of subsequent months in which this initial rating was maintained calculated. whether or not PTR knew of the likelihood of such damages. The factual information contained herein is from sources we believe to be reliable. The Power Rating measures the "timeliness" of a stock for purchase.) DISCLAIMER This report is a proprietary product offered by PriceTarget Research (PTR) and is based on proprietary databases. PriceTarget Research is not a broker dealer. its employees. and Appreciation Score are forecasts. The report contains publicly available information and information obtained from third parties (including JM Lafferty Associates. the evidence continues to indicate that PTR’s Overall Rating discriminates well between stocks that outperformed and stocks that underperformed over historical time periods. clients should consider whether it is suitable for their own particular circumstances.) In the case below the weak Price and Industry Scores offset the higher Earnings’ Score resulting in a mediocre Power Rating of 34. This report is not an offer to buy or sell any securities. 100=highest. financial situations. Inc. Finally. director. (For a PDF report on the Investment Performance of PriceTarget Research’s Stock Ratings. Percentiled relative to a universe of 8. PTR. No one at a covered company is on the Board of Directors of PTR Research or any of its affiliates. or F) is sustained over future periods is derived. whether high rated stocks outperform the universe and low rated stocks underperform. B. arising from use of this report. timeliness or completeness .jsp . special. 0=the lowest power rating. (It includes the stock’s price performance. exemplary or punitive damages. and has no investment banking services. indirect. may. the most desirable outcome is for performance data to be well−ordered over the full period as well as for each individual year.Xilinx Inc Rating Methodology (Continued) _____________ Power Rating. officer. officers directors. and so on. the likelihood that a specific rating (A. the Overall Rating provided an exploitable. PriceTarget Research constantly __ assesses how well the Overall Ratings perform over prior periods. Future terms are not guaranteed. from time to time. PriceTarget Research. Because the Price Target. Before acting on any information or rating in this report. and other techniques performed on this information that reflect subjective judgment. please see: http://pricetargetresearch. __ appreciation potential. and Standard & Poor’s Compustat). however such information has not been nor will be verified by us. outperform C−rated stocks. and Thomson First Call. does not make markets in any security. and investors may realize losses on any investments. 75 50 25 75 50 25 75 50 25 75 50 25 PRICE SCORE V EARNINGS SCORE 32 V 72 V 18 75 50 25 75 50 25 75 50 25 75 50 25 INDUSTRY SCORE POWER RATING V 34 ______________ Rating Results. behavior of other companies in the same industry group. and the trend in earnings’ expectations.. proprietary information. At each month end over the full historical periods. While past performance is no guarantee of future results. Performance for each rating category and the overall universe is measured over longer historical periods as well as for shorter intermediate periods with the focus on three key aspects of performance. A−rated stocks outperformed Cs and C−rated stocks outperformed Fs. and we make no representations as to its accuracy. other information is used to serve either as confirmation of the Price Target or to highlight cases in which the forecasts are not credible. It is for the general information of clients of PTR and other approved parties. The information and opinions in this report are current as of the date of the report. Clearly. Moreover. C.000 companies.