Updated from 9:11 a.m.

The constant chatter from analysts produces a thick mass of white noise, a deep static that nearly obliterates the very meaning of words. It's just another salvo of comments from analysts, who many investors blame for their losses. But every once in a while, a comment juts out at a right angle, sounds an alarm and slices through the patter.

Goldman Sachs

analyst

TST Recommends

Rick Sherlund did just that when talking about

Microsoft's

(MSFT) - Get Report

future. His note to investors, taken on face value, was typical. He announced that he was guiding his 2001 and 2001 fiscal earnings per share estimates lower, citing weakness in the PC sector, an area that Microsoft has a great deal of exposure to, since it bundles Windows with new computers.

Sherlund, who reiterated his market outperform rating, now expects the company to come in with revenue 10% lower than in the previous quarter. Accordingly, he dropped his 2001 earnings expectations to $1.75 a share from $1.78 a share, and 2002 to $1.75 from $1.86.

There. Right there. Sherlund's revised 2002 estimate. After what seemed like a rather innocuous earnings revision, the comment stuck out like Joe Theismann's shin bone. Sherlund doesn't think that Microsoft will make any growth in 2001 and 2002. And no growth means no story. And no story means no reason to snap up Microsoft stock.

"We have estimated flat to down (earnings) for each of the next four quarters and flat (earnings) for fiscal 2002," he wrote. "We believe investors may become more positive on the stock if indeed much of the bad news is now out."

Lehman Brothers

started coverage on six companies that make analog and mixed-signal chips, which end up in everything from telecommunications devices to scientific equipment. These chips are especially effective at taking real world phenomenon, like temperature, and converting that into a digital output. Unfortunately, these guys could be falling even more then they have in the past year.

Despite the nifty science involved, business has been tough, especially given the downturn in tech spending. Analyst Seth Dickson started

Analog Devices

(ADI) - Get Report

,

Linear Technology

(LLTC)

,

Maxim Integrated Products

(MXIM) - Get Report

,

Micrel

(MRCL)

,

National Semiconductor

(NSM)

and

Sipex

(SIPX)

at market perform, citing high inventories and low demand -- a critical problem for other companies, like electronics manufacturing service providers. And that problem has yet to be priced into stocks, according to Dickson.

"Current valuations do not accurately reflect the risk to fundamentals. We believe there is as much as 50% downside for analog stocks," he wrote to investors this morning.

The outlook for these companies is not good, really. Make sure kids are out of the room, because Dickson's comments are for adults only.

"Near-term, industry fundamentals continue to deteriorate, causing us to believe the (June quarter) and calendar 2001 earnings estimates are at risk. Longer-term, we believe pricing pressure and a global economic slowdown could prolong the industry correction into the second half of 2001," he wrote.

It's rare that an analyst will tout a stock as "BUY NOW," but Lehman Brothers did just that in a note to investors this morning. The headline for comments about

Forest Labs

(FRX)

screamed just that, in all capital letters.

"With the greatest likelihood of upside earnings surprises in our coverage universe and attractive valuation, Forest is currently our best investment idea by far," Lehman wrote. "Forest's robust earnings outlook coupled with short-term, medium-term and longer-term positive stock catalysts provide all of the ingredients we believe are required to invest with confidence in the current market environment."

Now

that's

a rave review.

Seems like the Internet company isn't a total dodo.

Prudential Securities

analyst Mark J. Rowen initiated coverage on two companies, starting

Homestore.com

(HOMS)

at a strong buy and starting

Ticketmaster

( TMCS), which includes both online and over-the-counter ticket sales, at hold.

Rowen gave Homestore the highest possible rating because of its high-margin business model and solid partnerships. He thinks the stock, which closed at $19.58 yesterday, could hit $32 in the next 12 months.

"Homestore.com addresses the real estate market, one of the largest sectors of the U.S. economy," he wrote. "In our opinion, (the company's) strategic alliances with key industry players will help the company build a fortress around its business, and sustain a competitive advantage."

Meanwhile, Ticketmaster received the cold shoulder, started at the rather tepid hold rating. Rowen just doesn't think the company can do too much more to sell tickets. The company, which ended trading yesterday at $8.13, has a price target of $10.

Upgrades

Netopia

(NTPA)

: UP to buy at W.R. Hambrecht.

Tele Celular Sul

(TSU) - Get Report

: UP to attractive from neutral at Bear Stearns.

Downgrades

24/7 Media

( TFSM): DOWN to hold from accumulate at Prudential Securities.

Applied Biosystems

(ABI)

: DOWN to buy from strong buy at Credit Suisse First Boston. DOWN to under review from buy at Robertson Stephens.

Applied Micro Devices

(AMCC)

: DOWN to long-term accumulate from strong buy at Robertson Stephens.

APW

( APW): DOWN to buy from strong buy at Credit Suisse First Boston.

Centillium Communications

( CTLM): DOWN to long-term accumulate from buy at Robertson Stephens.

Exar

(EXAR)

: DOWN to long-term accumulate from buy at Robertson Stephens.

JDS-Uniphase

(JDSU)

: DOWN to long-term accumulate from buy at Robertson Stephens.

PMC-Sierra

(PMCS)

: DOWN to long-term accumulate from buy at Robertson Stephens.

Vitesse Semiconductor

(VTSS)

: DOWN to long-term accumulate from strong buy at Robertson Stephens.

Initiations

AdvancePCS

(ADVP)

: NEW buy at W.R. Hambrecht; price target: $62.

Affiliated Computer Services

( ACS): NEW strong buy at Lehman Brothers; price target: $75.

Caremark Rx

( CMX): NEW buy at W.R. Hambrecht; price target: $18.

Exodus Communications

( EXDS): NEW accumulate at Bear Stearns; price target: $20.

Federated Department Stores

( FD): NEW buy at Robertson Stephens; price target: $63.