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Enron Mail |
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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Jeff Dasovich X-To: James D Steffes X-cc: X-bcc: X-Folder: \Jeff_Dasovich_June2001\Notes Folders\Sent X-Origin: DASOVICH-J X-FileName: jdasovic.nsf ----- Forwarded by Jeff Dasovich/NA/Enron on 03/15/2001 05:45 PM ----- Margo Reyna 03/15/2001 04:56 PM To: Sue Nord/NA/Enron@Enron, Scott Bolton/Enron Communications@Enron Communications, Lara Leibman/Enron Communications@Enron Communications, Donald Lassere/Enron Communications@Enron Communications, Mona L Petrochko/NA/Enron@Enron, Barbara A Hueter/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, Susan M Landwehr/NA/Enron@Enron, Marchris Robinson/NA/Enron@Enron, Ricardo Charvel/NA/Enron@Enron, Stephen D Burns/Corp/Enron@ENRON, Xi Xi/Enron Communications@Enron Communications, Allison Navin/Corp/Enron@ENRON, John Neslage/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Eric Benson/NA/Enron@ENRON, Karen Huang/Enron Communications@Enron Communications, Matthew Jachimiak/HOU/ECT@ECT, John Neslage/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Subject: Telecom Services: Broadband Services: USA: Analysts still bullish on Enron broadband unit ... Margo Reyna Regulatory Analyst Enron Corp., Government Affairs Phone: 713-853-9191 ----- Forwarded by Margo Reyna/NA/Enron on 03/15/2001 04:56 PM ----- djcustomclips@djinteractive.com 03/15/2001 04:54 PM Please respond to nobody To: 123363@WCTOPICS.djnr.com cc: Subject: Telecom Services: Broadband Services: USA: Analysts still bullish on Enron broadband unit ... USA: Analysts still bullish on Enron broadband unit prospects. By C. Bryson Hull 03/15/2001 Reuters English News Service (C) Reuters Limited 2001. HOUSTON, March 15 (Reuters) - Wall Street took a hard look at Enron Corp.'s content delivery plans this week after it ended its video-on-demand deal with Blockbuster Inc. , but remained largely unfazed by the failure of the flagship deal, analysts said on Thursday. On balance, most analysts viewed the busted 20-year exclusive agreement as disappointing, but by no means a fatal blow to Enron Broadband Services' (EBS) budding content delivery segment. Most reiterated buy or strong buy ratings for the Houston company and maintained bullish earnings targets for the Enron Broadband Services division. But all are awaiting an indication of how Enron will reconfigure the content delivery initiative. "I think Blockbuster represented kind of an anchor tenant for the broadband business, so they have lost a contract that was important," said Jeff Dietert, an analyst with Houston investment house Simmons and Co. Now EBS will have to pursue smaller contracts to make up the loss, which could mean a longer road to create as big a book of business, Dietert said. EBS executives have said they expect to have $1 billion in total contracted business by the end of 2001. CHASING MORE CONTRACTS TO FILL VOID EBS Chairman and Chief Executive Officer Kenneth Rice on Friday said his division is already pursuing deals with content providers to send on-demand games, movies, music and television over the Enron network. UBS Warburg analyst Ronald Barone, in a research note released Monday, said he still believes Enron will hit the $1 billion mark in 2001. "Though this announcement is clearly a disappointment we have a great deal of confidence in the judgment of Enron's senior management and of the upside associated with this business," Barone wrote. His report reiterated a strong buy recommendation and 12-month stock price target of $102 a share, with EBS accounting for $25 of that. One analyst remained skeptical of the content delivery plans. "Where they go from here is one of things they have to tell the market in a convincing fashion," said Commerzbank Securities analyst Andre Meade, who raised Enron to accumulate from hold on Thursday. But he also cut earnings targets for the EBS segment to $8.40/share because of the failed Blockbuster deal. Heady cash-flow projections figured heavily in Enron's guidance for 2001, which called for a stock price of $126, of which EBS would account for $40, Meade said. Meade, whose company initiated coverage on Enron in late May 2000, had been alone among Enron analysts in keeping a hold rating on the stock. Merrill Lynch analyst Donato Eassey on Monday released a note reiterating his buy recommendation with a $99/share price target. "While the separation from such a high-profile name is disappointing, we do not view this as negative," Eassey wrote. "This could in fact actually accelerate Enron's content delivery strategy." Eassey pointed out that Enron and Blockbuster's trial in Seattle, Salt Lake City, New York and Portland, Ore., proved Enron can deliver movies on demand. That gives them a track record to show to potential customers like movie studios and other entertainment concerns that want to provide content directly through their Web sites, he said. Enron's stock closed on Thursday at $66.53, up $3.78, compared with its 52-week range of $59.99 to $90.5626. Folder Name: Telecom Services: Broadband Services Relevance Score on Scale of 100: 80 ______________________________________________________________________ To review or revise your folder, visit Dow Jones CustomClips or contact Dow Jones Customer Service by e-mail at custom.news@bis.dowjones.com or by phone at 800-369-7466. (Outside the U.S. and Canada, call 609-452-1511 or contact your local sales representative.) ______________________________________________________________________ Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved
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