Enron Corp. - University of California | Office of The President

global energy powerhouse engaged in all facets of the energy business.... Enron
is the premium global diversified energy company ....
147. On 4/13/99, Merrill Lynch issued a report on Enron, rating Enron a "Long-Term
Buy," forecasting 00 EPS of $1.365, an 18% five-year EPS growth rate for Enron and stating:
• [Q]uarter-over-quarter operating earnings were up by 5%. The driving force
behind this growth was the continued strength of Wholesale Energy Operations and
Services.
• ... [W]e consider [Enron] one of the blue chip companies in our universe ....
Its plate of opportunities is as full as it has ever been, and we do not see ENE's
growth rate slowing any time soon.
• ... We continue to recommend investors accumulate ENE.
148. On 4/14/99, CIBC issued a report on Enron, rating forecasting 99, 00 and 01 EPS of
$1.15, $1.325 and $1.475 for Enron, and stating:
Enron reported 1999 Q-1 income of $253 MM or $[0.34] per share ... above our ...
estimate .... Improved performance was driven by continued momentum at Enron
Wholesale Services.... Accordingly, we believe longer term earning power should
build at attractive rates ....
* * *
In recent months the relative strength in ENE shares can be attributed to three factors.
1) continued momentum at Enron Wholesale Services 2) rising expectations and
valuations for Enron Energy Services (EES), Enron's retail marketing arm, following
management's increased expectations for the potential size of the higher margin
energy management/outsourcing business, and 3) clarification of the company's
strategy and potential in communication and water businesses. As management
continues to build on core strengths in these areas we would expect the share price
premium to hold.
149. On 4/15/99, Merrill Lynch issued a report on Enron, rating Enron a "Long-Term
Buy," forecasting 00 EPS of $1.36 and an 18% five-year EPS growth rate for Enron, and stating:
• [W]e consider [Enron] one of the blue chip companies in our universe of
natural gas stocks.... [W]e do not see ENE's growth rate slowing any time soon.
• Year-to-date, ENE's stock price is up 14%, reflecting its growth prospects.
We continue to recommend investors accumulate ENE.
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