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From: 	cgi@eq.gs.com@ENRON [mailto:IMCEANOTES-cgi+40eq+2Egs+2Ecom+40ENRON@ENRON.com]  On Behalf Of scott@nypcdsn02.eq.gs.com; caven@gs.com
Sent:	Monday, April 02, 2001 6:02 PM
To:	Derrick Jr., James
Subject:	Goldman, Sachs & Co. - Enron Corp.

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Goldman, Sachs & Co. Investment Research - Documents
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                 Goldman, Sachs & Co. Investment Research

 ENE:  This Overachiever is Underperceived Even as Prospects Improve: Buy

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* Enron share price has fallen sharply (by 35%) from recent Jan high as   *
* investors have focused on issues we view as almost insignif. to future  *
* valuation and ignored the extremely strong and, we believe, improving   *
* fund. in key growth businesses.  We cont. to estimate future LT (over   *
* five years) EPS growth at 25% versus consensus 17% est. as ENE Wholesale*
* Services appears likely to sustain 20% plus LT growth even as Retail    *
* (EES) is emerging as a more powerful growth engine than perceived by    *
* investors and telecom has interesting prospects.  We strongly reit. our *
* Buy rating, forecast very strong NT EPS results and see the segments of *
* ENE that generate earnings as trading at only 20X 01 EPS.               *
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  David Fleischer, CFA (New York) 1 212-902-6018  -  Investment Research
  David Maccarrone, CFA (New York) 1 212-902-0324  -  Investment Research
   Eric W. Mandelblatt (New York) 1 212-357-7547  -  Investment Research

=====================  NOTE  6:20 AM  March 29, 2001  =====================

                             Stk  Latest  52 Week  Mkt Cap   YTD Pr    Cur
                             Rtg  Close    Range    (mm)     Change   Yield
                             ---  ------  -------  -------   ------   -----
Enron Corp.                   RL  58.10    90-55   43374.6   -30%      0.9%

                  --------------Earnings Per Share---------------
ENE (US$)          Mar     Jun     Sep     Dec      FY       CY
      2002 FY
      2001 FY      0.46                             1.80
      2000 FY(A)   0.40    0.34    0.34    0.41     1.47

                   -Abs P/E on-   -Rel P/E on--   EV/NxtFY  LT EPS
                    Cur    Nxt     Cur    Nxt     EBITDA    Growth
                   -----  -----   -----  -----   --------   ------
ENE       FY       32.3X    NMX    1.6X    NMX        NA        25%

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*  Investors appear to have been racing to sell ENE shares because of its
   apparent high P/E multiple (ignoring the considerable value of segments
   including Enron Energy Services, telecom and non-energy wholesale
   services) and misconceptions about a number of issues including its
   stalled asset disposition program (the Portland General Electric sale
   could be significantly delayed), the market position of its Indian power
   plant and California energy issues.  We believe that the current period
   of perceived uncertainly is actually an excellent opportunity to buy
   into a company that we view as virtually unique in the economy.  We
   believe that the energy industry in the United States and world is
   undergoing a major transformation and that a very few companies led by
   Enron are positioned to create efficiencies and provide the products,
   services and flexibility required by customers.  We believe these
   opportunities will lead to growth in earnings of 25% over the long term
   even if telecommunications makes only slow progress and does not come
   close to reaching our expectations.

*  Enron is likely to report strong results in Q1 and 2001 from all core
   businesses.  Although mgmt indicated on its March 23rd conf. call that
   it was 'very comfortable' with  ests of $1.70 to $1.75, we continue to
   be very confident that the company will equal or exceed our $1.80
   estimate.  Wholesale Services is likely to have an 'outstanding quarter'
   according to CEO Jeff Skilling with a 25% to 35% increase in natural gas
   volumes and a doubling of financial volumes.  Retail appears on track to
   achieve its $30 billion of new contract signings and turn profitable in
   2001 on a fully allocated basis.  Telecom has progressed at a slower
   pace than expected by investors as bandwidth trading has turned out to
   be more complicated to implement than some believed and the content
   business (now without Blockbuster as a partner) appears to also be
   developing more slowly than implied by Enron in 2000.  This said, the
   business opportunities in both parts of telecom appear to be excellent.

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Important Disclosures (code definitions attached or available upon request)
ENE        : US$ 58.10; CF, CP, M
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