Lehman Brothers'

analyst Dan Niles cut 2001earnings estimates on two chipmakers, citing a decline in pricing and profit margins. It cut memory chipmaker

Micron Technology's

(MU) - Get Report

earnings per share, or EPS, to 35 cents from $1.25.

Cypress Semiconductor's

(CY) - Get Report

estimates were lowered to $1.80 from $2.20 a share.

In a research note, Niles wrote "Much of the equipment bought over the past six months is only starting to ramp to full capacity. The supply situation will likely get worse in the first half, while demand looks sluggish at best, with large inventory levels in the supply chain."

Niles also wrote that his firm believes the bottom will be reached only in the third quarter or fourth quarter.

Merrill Lynch

downgraded

Nokia

(NOK) - Get Report

to buy from accumulate. The firm also lowered estimates on Nokia and three of its competitors, saying that while European telecom equipment makers are near a bottom, there is still downside risk on the horizon.

The company lowered Nokia's EPS estimate for 2001 to 79 cents from 88 cents and 2002 EPS to $1 from $1.23.

Ericsson's

(ERICY)

2001 EPS were lowered to 17 cents from 20 cents and its 2002 EPS to 34 cents from 43 cents.

Alcatel's

(ALA)

2001 EPS were cut to $1.49 from $1.70 and its 2002 EPS to $1.77 from $2.20.

Marconi's

2001 EPS were chopped by 14% and its 2002 EPS by 8%.

Lehman also cut Nokia's 2001EPS estimate to 79 cents from 84 and its 2002 EPS estimate to 99 cents from a range of $1.01 to $1.06.

Upgrades

Allegiance Telecom

(ALGX)

: UP to strong buy from buy at

Robertson Stephens

.

Downgrades

Cisco

(CSCO) - Get Report

: 12-month price target DOWN to $40 from $45 at

Credit Suisse First Boston

. The firm also lowered estimates because evidence is mounting "that the U.S. economy is having a worse-than-expected impact on technology companies."

The firm reduced Cisco's July quarter's EPS to 13 cents from 14 cents, which changed its 2001 estimate to 60 cents from 63 cents. Also, CSFB lowered its 2002 EPS estimate to 75 cents from 79 cents.

Motorola

(MOT)

: March quarter DOWN to a loss of 1 cent from a profit of 12 cents and 2001 EPS view DOWN to 50 cents from 80 cents at Merrill.

Roadway Express

(ROAD) - Get Report

: DOWN to hold from buy at CSFB.

WPP Group

(WPPGY)

: DOWN to hold from buy at

UBS Warburg

. Also, CSFB started the company as a hold.

Initiations

Lexent

(LXNT)

: NEW buy at CSFB.

Mercury Interactive

(MERQ)

: NEW buy at

W.R. Hambrecht

; price target: $80.

NTL

(NLI)

: NEW buy at CSFB; price target: $48.

Seitel

(SEI)

: NEW intermediate-term accumulate and long-term buy at Merrill. 2001 EPS estimate is $1.30 and 2002 EPS estimate is $1.65, while the 12-to-18 month price target is $30 a share.

Group Moves

CSFB starts coverage on three electronics manufacturing companies: