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Updated from 8:44 a.m. ET

Lehman Brothers

slashed its price target on

Sycamore Networks


this morning and lowered its 2001 forecasts, warning of the risk of customer concentration.

However, waxing poetic, Lehman analyst Steven Levy affirmed that Sycamore, which yesterday reported

second-quarter earnings that topped analysts' expectations by a penny, has "strong branches that can withstand winds blowing from all directions" in the turbulence of the "telecommunications spending storm."

Investors lapped up the prose today and sent shares of Sycamore climbing $3.63, or 16%, to $26.25 on the

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Levy, who cut his price target to $75 from $150, also revised his 2001 outlook. He lowered his full-year 2001 revenue estimate to $778 million, down from $791 million. But he raised his 2001 earnings estimate to 27 cents a share from 26 cents.

In his report, Levy warned of softening telecommunications spending, in particular from Sycamore's "largest and most important customer,"

Williams Communications


. Levy said Williams "has signaled its intent to lessen its demand for many of its equipment providers." The Tulsa, Okla., fiber-optic company, which is building one of the largest fiber-optic networks in the nation, has, indeed, showed recent signs of a

liquidity crunch.

However, Levy's sentiments for Sycamore were nothing if not optimistic. "Despite these turbulent waters, we continue to see evidence reinforcing the concept that there is still one large island where the seas appear serene," Levy wrote. "Last night we had another glimpse at this island and observed it appears to be covered with trees, specifically Sycamore trees."