Credit Suisse First Boston keeps its outperform rating on El Paso ).
Analyst Curt Launer says shares of the natural gas company dropped further Tuesday, as fears of liquidity crisis due to an administrative law judge's ruling are clear. The judge says El Paso manipulated the California natural gas market by holding back supplies.
Launer notes, at best, the decision will be oveturned entirely. He says El Paso's cash position, low debt maturities, ongoing pipeline and exploration and production operations suggest that the next critical point will be May 2003 when El Paso's $3 billion credit line is due for renewal.
Launer notes El Paso has about $1.3 billion of cash; debt maturities are $50 million for the rest of 2002 and $1.5 billion in 2003. He says in a worst-case scenario of a loss for El Paso of $3 billion, he sees a trading value of $16 to $18 a share.