Nice Systems

(Nasdaq:NICE) keeps getting downgraded. Today

Bank Hapoalim

joined the list, cutting it from Buy to Hold. Analyst Catherine Lemaitre has set a target price of $19.5, which is 30% above the market price.

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The analyst predicts that Nice's revenues in the fourth quarter of 2000 will fall 15% short of those in the previous quarter. The drop is said to be a result of a worldwide slump in information technology investments, which has squeezed the revenues of the company's customer management division. Lemaiter also notes that Nice stopped receiving orders from American jails - the main customers for its digital view recording system during the American presidential race, due to a moratorium on public spending at that time.

Lemaitre believes that Nice's revenue growth in 2001 will fall substantially, a trend carried on from the fourth quarter of 2000. This is in contrast to previous years, when Lemaiter says Nice's fourth quarter was usually its strongest, as some of its customers would bring their orders forward.

Lemaitre notes that the slowdown in revenue will sharply affect Nice's net profit, especially in the first quarters of 2001. In addition, the company's rigid expenditure structure, comprised mainly of wages for its technical support personnel, will markedly impact net earnings in the first quarters of 2001. She forecasts that Nice's revenues in 2001 will total $198 million, and EPS will come to $1.50. Lemaitre predicts that any improvement at Nice will only occur in the second half of 2001.