Analyst Actions: AT&T, Cisco, Enron, KeySpan

Goldman Sachs lowered AT&T's(T) 2001 EPS estimate to 27 cents from 79 cents and set the 2002 EPS at 33 cents a share. The shares are on the firm's U.S. recommended for purchase list.

Analyst Frank Governali made the cut because of "intensifying" competition and continued price erosion in the long-distance telephone market.

"Our new estimates incorporate, in part, all the information that has been conveyed to the Street over the past couple of months, as well as our assessment of T's competitive position in its relevant markets, " Governali wrote in the note.

The company has planned a breakup into four companies. Also, last year, its wireless phone unit AT&T Wireless(AWE) was the largest IPO in U.S. history at $9 billion.

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In a research note entitled "Death by a Thousand Cuts -- Slashing Estimates Again," Credit Suisse First Boston cut Cisco's(CSCO) estimates once more.

CSFB's Lissa Bogat said her firm was cutting estimates to reflect the networking company's comments Friday, in which it formally announced it was cutting about 15% of its workforce and hinted at an earnings shortfall. Bogat said the estimates are already at the low end of the Street range.

Still, she lowered its current quarter's estimate to 7 cents from 11 cents a share and for the next quarter to 11 cents from 13 cents a share, which brings the full-year 2001 estimate to 53 cents from 60 cents a share. She said that implies EPS is down 39% year-over-year for the second half of 2001.

The firm lowered its full-year 2002 estimate to 70 cents from 75 cents a share, saying "proposed cost-reduction actions should mitigate the impact of our reduced revenue forecast."

The note went on to say: "Our new revenue forecast normalizes growth for the five-year period from 1998 to 2003 to forecast the second half of this time period. We have also reality-checked this forecast with a product-by-product forecast, which demonstrates upside to our growth rate for calendar 2003.

"We believe that Cisco has the ability to grow 25% to 30% on the top line, but investors are not likely to give the company credit for this until there is greater visibility. For now, we continue to expect investors to discount a growth rate at the lower end of the 20% to 25% range, which does not, by our calculations, imply much downside from here."

Upgrades

Equitable Resources (EQT): price target UP to $93 from $89 at Goldman.

Kinder Morgan (KMI): UP to strong buy from buy at CSFB.

Pitney Bowes (PBI): UP to $41 from $35 at Lehman Brothers.

Downgrades

Dominion (D): DOWN to buy from strong buy at CSFB.

Enron (ENE): price target DOWN to $110 from $128 at CSFB; price target DOWN to $95 from $102 at Goldman.

KeySpan Energy (KSE): DOWN to hold from buy at CSFB.

Noble Affiliates (NBL): DOWN to market perform from buy at Lehman; 2001 EPS view DOWN to $5.85 to $6.50 and 2002 EPS view DOWN to $3.05 from $3.35.

Initiations

Manugistics (MANU): NEW long-term attractive at Robertson Stephens.

Maximus (MMS): NEW strong buy at Lehman; price target: $45.

PeopleSoft (PSFT): NEW long-term attractive at Robbie Stephens.

Universal Compression(UCO): NEW buy at Lehman; price target: $44.

Group Moves

Lehman lowered its investment opinion to market perform from strong buy on oil and gas exploration and production companies, Noble Affiliates(NBL) and Pioneer Natural Resources(PXD).

The firm said the average exploration and production stock has doubled over the last year and that it now believes that the shares are approaching fair value. But "downside risks to our commodity price forecast have increased as a result of growing concerns about natural gas demand." Lehman added that "slower economic growth this year could lead to slower than expected electric power and natural gas growth this summer."

Noble's 2001 EPS estimate was cut to $5.85 from $6.50 and 2002 EPS estimate DOWN to $3.05 from $3.35.

Pioneer's 2001 EPS estimate was knocked down to $2.20 from $3. Its price target was lowered to $20 from $23.

Also, Lehman upped its price targets for several waste companies:

• Allied Waste(AW) UP to $22 from $18.

• Republic Services(RSG) UP to $21 from $18.

• Waste Management(WMI) UP to $36 from $32.

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