Markets & Finance

Prudential Cuts Enron to Sell


Prudential cut its investment rating on energy merchant Enron (ENE) to sell.

Analyst Carol Coale notes recent news of the SEC inquiry into related party transactions sent Enron down to a new 52-week low. She adds the management's conference call with Street on Tuesday did little to restore confidence. Coale also is concerned the SEC inquiry into the transactions could lead to further investigations into other partnership transactions with which Enron could have similar equity exposure.

The analyst adds that Enron is likely to face another equity hit of at least $1B in addition to unknown equity reductions related to potential dissolution of other partnership transactions. She slashed her price target for the stock to $15 from $55.


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