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

improve Enron's performance, and its superior execution should continue to
differentiate the company from its peers.
Enron Broadband Services bandwidth trading and content delivery are all ahead
of schedule, and should provide an excellent growth vehicle alongside its core
energy businesses.... EBS is not just a high-growth earnings vehicle, but
represents a paradigm shift in the way businesses will begin to outsource their
telecom and risk-management needs and demand telecom pricing to properly
reflect usage.
EBS's initial performance targets now seem grossly conservative, and we are
confident that Enron will consistently tear through them during 2H00.... Notable
is an exclusive, 20-year contract with Blockbuster to stream on-demand movies.
It represents a fundamental shift in both the telecommunications and
entertainment industries, and we believe more deals like it will follow.
* * *
Retail Energy Services continues hypergrowth .... Enron is on track to reach a
year-end contracting target of $16B. It logged $3.8B of new contracts last quarter,
and should continue to ramp up revenues throughout the rest of the year.
249. On 7/24/00, CitiGroup issued a report on Enron. It rated Enron a "Buy," maintained
a $100 price target for the stock and forecast 00 and 01 EPS of $1.43 and $1.70 and a 20% long-term
EPS growth rate for Enron. It also stated:
• ENE reported strong 2Q:00 operating EPS of $0.34 ... and above our $0.32
estimate.
• Key segment, wholesale energy up 23% .... Key driver of growth:
EnronOnline, volumes up 92%, now accounting for 60% of all trades.
• Bandwidth beginning to show critical mass: 50 trades with 17
counterparties. We expect transactions to pick up steam over the next 6-12
months.
* * *
• Enron Energy Services (retail energy) profit growth continues, $24M,
compared with $16M in 1Q:00.
• We maintain our estimates and reiterate our "Buy" rated on ENE.
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