Palm

(PALM)

was up 3.1% in preopen

Island

trading after

Lehman Brothers

sliced its 12-month price target to $25 from $60 and cut its fourth-quarter and full-year revenue estimates.

Lehman also cut its 2001 earnings estimate for the hand-held computer maker to 16 cents from 18 cents, saying it believes there has been a sales slowdown in March.

Lehman also slashed its target for

Handspring

(HAND)

to $28 from $90.

Handspring had not yet traded preopen.