Lehman Brothers

has rated

Partner Communications

(PTNR) - Get Report

a buy. The investment bank set a price target at $12 a share, double Partner¿s market price but lower than the $13.50 a share it set a year ago.

UBS Warburg

gave a price target of $20 a share and

Morgan Stanley Dean Witter

opted for $14 a share. Unlike UBS and Morgan Stanley, Lehman was not one of Partner's underwriters. But it is a leading candidate to underwrite the

IPO of one of Partner's two rivals in the Israeli market,

Cellcom

. (The other cellular carrier in Israel is

Pele-Phone Communications

).

Lehman analyst Will Draper says he believes believes Partner is the best positioned to grow. He believes it will finish 2000 with 18% of the market, growing to 22% in 2001 and above 25% by 2002.

Analyst Lowers M Systems' Target

Analysts at

Union Bank of Israel

have lowered the price target of

M Systems Flash Disk Pioneers

(FLSH)

from $50 to $38 and reiterated its strong buy recommendation. The new target is 66% above the stock's market price..

M Systems has posted first-class reports for the quarter, easily hurdling analyst forecasts for both revenues and net profit, but hasn't been able to repeat its performance of first six months of 2000, after almost doubling its profit-per-share forecasts in both quarters.

Bank analysts Ayelet Regev and Samy Kahoonay believe that the company will grow at a rate of about 20% per quarter, lower than the 30% rate in recent quarters. M Systems develops and manufactures miniature flash memories for data storage. Its flash disks have come to be used mainly in small Internet access devices, like cell phones and personal digital assistants.

Meanwhile, M Systems has begun a campaign to add to its staff of 250 to man its new R&D center in Omer, a town in the Negev very close to Be'er Sheva.

Chipmaker's Sales Up

Tioga Technologies

(TIGA)

on Tuesday reported relatively encouraging results for the third quarter, after especially weak results in the second quarter.Tioga, an xDSL-chip maker spun off from

Orckit Communications

(ORCT)

this spring, posted sales of $5.6 million, 91% above the previous quarter. American investment bank

Kaufman Bros.

had predicted a much lower $3.7 million.

The figure incorporates revenues generated by Jerusalem-based

Silicon Value

, another Orckit subsidiary acquired in April. Silicon Value merged with Orckit¿s chip division, which was later spun off as Tioga.

Its revenue prediction for the year slipped to $14 million, although, an earlier forecast had Silicon Value alone bringing in $15 million.

Tioga's gross profit margin was 13%, below the forecast 14%. Net losses came to 15 million shekels ($3.7 million), but then the company lost a hefty net $45.5 million in the previous quarter, with losses bloated by one-time expenses.Tioga¿s loss per share is expected to be $3.20 for the year, excluding amortization and one-time expenses of $1.14.

TheMarker is a leading source for technology and business news information in Israel. The site is a venture backed by the Israeli daily Haaretz and TheStreet.com. For more stories from TheMarker, go to

http://www.themarker.com/eng.