Nice Systems (Nasdaq:NICE) stock attracted lively attention after the September 11 terror attacks on the United States, on estimates that demand for its products would surge. It well may, but there are other problems, concludes Israel's Mizrahi Bank. Analyst Shai Ben Amar concurs that demand for certain Nice products will rise. But he worries that the surging hostilities in Israel will put off investment in local IT companies.

Mizrahi therefore reiterated a Hold rating for Nice and $18.1 price target, only 7% above the market.

Nice could see increased demand for digital recording products by its VIM - visual interaction management ¿ products and for its ISS - interaction systems solutions for airports, Ben Amar wrote. But both the VIM and ISS divisions are subject to a long sales cycle.

Meanwhile, Nice could find sales of its key CEM ¿ customer experience management ¿ systems dropping off after the September attacks.

The current market conditions, characterized by extremely low visibility, are quite challenging for Nice, Ben Amar concludes. Based on that and on Nice's current share price, Ben Amar advises investors to wait until the company demonstrates that it is capable of translating its excellent R&D capacity ¿ as shown by recent product launches - into actual sales.

Bank Mizrahi predicts fourth-quarter revenue of $36.6 million, the median of forecasts. For the year the bank predicts a 17.7% slide against 2000 to revenue of $126 million. For 2002, the bank expects a 26.2% increase in revenue to $159 million.

Ben Amar estimates a net loss of $24.7 million for 2001, excluding one-time items, rising to net profit of $1.8 million in 2002 and $17.5 million in 2003.