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

five-year EPS growth rate for Enron. It also stated: "Stock will recover on strength of core
business franchise."
380. On 10/23/01, JP Morgan issued a report on Enron. The report rated Enron a "Buy"
and forecast 01 and 02 EPS of $1.82 and $2.17 for Enron. It stated:
Enron Corporation (BUY)
ENRON DROPS PRECIPITOUSLY ON CREDIT AND SEC INQUIRY ISSUES;
REITERATING OUR BUY BUT REDUCING TARGET PRICE TO $50
We are reiterating our Buy on Enron in the wake of severe price underperformance
in the past few days stemming from credit and financing concerns.
* * *
... We continue to believe this is a crisis of perception that Enron can address through
further clarity and transparency.
* * *
A Securities Exchange Commission (SEC) inquiry has begun, further contributing
to weakness of the stock. It is important to note that this inquiry does not suggest
that the SEC is accusing Enron of any particular securities violations. The only silver
lining to this situation is that Enron was always acutely aware of the appearance of
impropriety. It had gone to great lengths to assure that all transactions were properly
reviewed, supported through fairness opinion, outside counsel opinions, etc.
Because of that, we believe that the inquiry will be concluded relatively quickly.
381. On 10/24/01, Lehman Brothers issued a report on Enron. The report continued to rate
Enron a "Strong Buy," continued to forecast 01 and 02 EPS of $1.82 and $2.18 for Enron and
continued to forecast a 20% five-year EPS growth rate for Enron. It also stated:
• Ample liquidity exists to handle short term credit needs. $1.7 billion remains
on commercial paper backup lines and supplemental revolver.
* * *
• We heard nothing to sway us from our conviction that the stock should be
bought aggressively ....
382. On 10/25/01, Enron issued a release, stating:
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