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Technology Stocks : John, Mike & Tom's Wild World of Stocks -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (2507)	10/23/2001 3:09:47 PM
From: John Pitera	Read Replies (1) \| Respond to of 2850

SSB Sticks with Buy on ENE for the moment, but admit it's a complex situation. Salomon Smith Barney ~ October 19, 2001 Enron Corporation (ENE)# ENE: REITERATE BUY; BUT CONCERNS REMAIN 1H (Buy, High Risk) Mkt Cap: $21,013.4 mil. October 19, 2001 SUMMARY * We reiterate our Buy rating on Enron after untangling part of a complicated story involving their balance sheet, cash flow and business practices. * Although we think we have bounded the most important issues facing Enron, we cannot rule out that our viewpoint will change given the complexity of their off-balance sheet financing vehicles and the uncertainty and magnitude of potential write-offs Brian Chin * The chief issue facing Enron, in our view, is the weakening of their credit standing following $2.21 billion in write-offs, announced last week. Moody's has placed Enron's debt on notice for possible downgrade. * Offsetting these concerns: cash flows appear solid over the balance of the year and 2002; and their core Merchant Energy operating performance is solid. * We see these as Enron-specific issues, not affecting other Energy Merchants such as Dynegy (DYN#-1H $44) FUNDAMENTALS P/E (12/01E) 16.1x P/E (12/02E) 13.5x TEV/EBITDA (12/01E) NA TEV/EBITDA (12/02E) NA Book Value/Share (12/01E) $15.66 Price/Book Value 1.9x Dividend/Yield (12/01E) $0.52/1.8% Revenue (12/01E) $100,789.0 mil. Proj. Long-Term EPS Growth 23% ROE (12/01E) 11.5% Long-Term Debt to Capital(a) 43.0% ENE is in the S&P 500(R) Index. (a) Data as of most recent quarter SHARE DATA RECOMMENDATION Price (10/18/01) $29.00 Current Rating 1H 52-Week Range $84.63-$25.15 Prior Rating 1H Shares Outstanding(a) 724.6 mil. Current Target Price $55.00 Convertible No Previous Target Price $55.00 EARNINGS PER SHARE FY ends 1Q 2Q 3Q 4Q Full Year 12/00A Actual $0.40A $0.34A $0.34A $0.41A $1.47A 12/01E Current $0.47A $0.45A $0.43A $0.46E $1.80E Previous $0.47A $0.45A $0.43A $0.46E $1.80E 12/02E Current NA NA NA NA $2.15E Previous NA NA NA NA $2.15E 12/03E Current NA NA NA NA NA Previous NA NA NA NA NA First Call Consensus EPS: 12/01E $1.81; 12/02E $2.14; 12/03E NA