<<MF April 23rd 2001.pdf>>

			Good Monday Morning - Comments From The Local Guys!

At the end of 2000, a new Federal Insider-Trading Rule (Rule 10b5-1) was
adopted by the SEC under the Securities Exchange Act of 1934. This rule
greatly enhances an insider's/employee's ability to trade his/her corporate
shares during blackout periods.

We, the Local Guys would like our readers to know of this new rule change
because of its significant advantages over the prior insider trading rules.
Previously, without the protection of this new SEC rule, employees and
insiders could safely trade only outside of designated blackout windows.

Under this new rule, insiders/employees may have the ability to purchase and
sell their corporate shares even during blackout periods if a written plan
was established and in force when the insider/employee was not in possession
of material, non-public information.  The new rule contains other
restrictions and should be reviewed carefully.

Lehman Brothers has established a turn-key plan that take into account the
regulatory procedures for establishing such a plan.

Please email us or call us for more information.


The 30-year US T-Bond yield is 5.72%.
The 10-year yield is 5.18%.
The 5-year is trading at 4.69%.
Spot crude oil is trading at $27.81 p/b.
Natural Gas - Henry Hub -  is trading at $5.12 p/mcf.

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				Lehman's Research.

IMPACT CALLS

Oracle Corp(ORCL) 2 - Buy N. Herman, .212.526.6093
Near-term WorriesDowngrade Oracle to a 2 (C)
OLD NEW STREET P/E
Price: $19.75 EPS 2000 N/A $0.34 N/A N/A
52 Wk Ra: $46 - 13 EPS 2001 $0.44E $0.44E $0.44E 44.9
Mkt Cap: $118.8B EPS 2002 $0.55E $0.49E $0.52E 40.3
FY: 5/31 Price Target $50 $50
Rank 1 2
*Although its still early in the quarter, we worry that what is typically a
seasonally strong quarter for Oracle could prove to be
unusually weak given the tough U.S. macroeconomic environment and
potentially weakening conditions in international markets.
*Apparently, more Sun servers are sold running Oracle software than anything
else. Weak results and guidance from Sun only serve
to compound our near-term worries.
*We believe that IBM with DB2 is exerting some price pressure on Oracle and
is gaining momentum with Morgan Stanley and
Goldman Sachs being two high profile firms making big commitments to DB2.
*With its rise over the last two weeks, shares of Oracle are trading at a
significant premium to the historic range both on a PE and
revenue multiple basis despite near-term uncertainty. Lowering earnings
estimates and rating to 2-Buy.

INITIATING COVERAGE

Agere Systems(AGRA) 3 - Market Perform A. Chanda, .415.274.5370
A Communications Component Giant is Unleashed (C)
OLD NEW STREET P/E
Price: $7.57 EPS 2000 N/A $0.32 N/A N/A
52 Wk Ra: $8 - 4 EPS 2001 N/A -$0.05E N/A N/A
Mkt Cap: $12.4B EPS 2002 N/A -$0.07E N/A N/A
FY: 12/31 Price Target N/A N/A
Rank N 3
*We are initiating coverage of Agere, a communications components gorilla.
We note that the valuation is low but given slowdowns in
capital spending and inventories and margin contraction we would prefer to
stay on the sidelines until fundamentals improve.
*We are establishing C01 revenues of $4.1 billion (-20% y/y) and C02
revenues of $4.4 billion (up 8% y/y) and EPS of a loss of $0.15
and a loss of $0.02.
*Agere had 31% of revenues in optoelectronics and 69% in ICs in Dec:00. The
vast majority of optoelectronics is in active
components and modules. In ICs, roughly 10% is in storage, 10% in wireless
terminals and infrastructure, 12% in wireless LAN,
37% in access (SLICs, modems) and 31% in communications. Agere tends to sell
most IC products in the form of ASICs
manufactured internally. Agere's only large customer is Lucent which was 17%
of revenues in December.

FOCUS STOCKS

Exodus Communications(EXDS) 2 - Buy H. Blount, .212.526.9128
If the Decks are Cleared -- Buy (C)
OLD NEW STREET P/E
Price: $9.75 EPS 2000 N/A -$0.54 N/A N/A
52 Wk Ra: $69 - 6 EPS 2001 -$0.89E -$0.89E -$0.85E N/A
Mkt Cap: $5.2B EPS 2002 -$0.51E -$0.51E $0.13E N/A
FY: 12/31 Price Target $20 $20
Rank 2 2
*We believe Exodus will have an opportunity to "Clear the Decks" of bad news
during 1Q01 earnings. If so, we believe investors
should begin to aggressively buy the stock.
*If EXDS reports weak bookings and brings down 2001 revenue guidance to
street consensus, it will "clear the decks" of further bad
news. Under this scenario, we would suggest investors become more aggressive
in purchasing the stock, despite lack of future
visibility.
*The primary scenario where we would remain cautious would be if EXDS
reports weak bookings and does not lower 2001 revenue
guidance.
*Based on three different valuation analysis, we believe EXDS has a
favorable 2 to 1 reward/risk ratio from current levels.

Paper & Forest Products P. Ruschmeier, .212.526.9898
Rally in Wood Product Markets Picking Up Steam
*As the rally in wood products picks up steam, we are reiterating our
favorable ratings on the following wood product producers: LPX,
GP, WY, BCC, TIN, BOW, and to a lesser degree, IP.
*The rally in wood product markets picked up steam last week as cash prices
for plywood, OSB, and lumber jumped 9%, 9%, and 3%,
respectively. The rally is supported by 1) seasonal strength, 2) sharply
lower interest rates, 3) firm demand, 4) low pipeline
inventories, and 5) GP's plans to permanently close 1.4% of North American
plywood capacity. In addition, the Department of
Commerce will likely rule today on whether to investigate countervailing
duties.
*If the current rally in wood product markets continues, the risk to our
estimates will be on the upside.

Tellabs, Inc(TLAB) 1 - Strong Buy S. Levy, .212.526.2499
Snake Bit (C)
OLD NEW STREET P/E
Price: $35.58 EPS 2000 N/A $1.67 N/A N/A
52 Wk Ra: $77 - 31 EPS 2001 $1.75E $1.55E $1.72E 23.0
Mkt Cap: $14.8B EPS 2002 N/A $2.00E $2.58E 17.8
FY: 12/31 Price Target $50 $50
Rank 1 1
*Our confidence in healthy SONET sales continues unabated and we believe the
current slowdown in sales of the TITAN 5500 solely
reflects service provider spending uncertainty and not a fundamental
architectural shift or any slackening in demand for high
bandwidth services.
*Actual March quarter sales of $772 mil met our revised projection of $772
mil with final EPS of $0.29 in line with our expectations.
*We now project sales and EPS including g/w amort of $3.6 billion and $1.55
in 2001 and $4.439 billion and $2.00 in 2002. Our new
estimates also project 2001 TITAN 5500 sales of $1.95 bil and $2.145 bil in
2002 (10% growth), TITAN 6500 and 6100 system of
$175 mil in 2001 and $340 mil in 2002, and continue to expect initial sales
of both in 2Q.
*We est. a minimal 3-5 year sales CAGR of 20% for Tellabs and believe the
shares should trade at 25x our new CY02 est, or $50 by
the end of the year. We reiterate our 1 Strong Buy and $50 price target.

QUALCOMM Inc(QCOM) 1 - Strong Buy T. Luke, .212.526.4993
Previewing Solid 2Q01, Maintain 1 Buy (A,C)
OLD NEW STREET P/E
Price: $66.33 EPS 2000 N/A $1.05 N/A N/A
52 Wk Ra: $120 - 43 EPS 2001 $1.27E $1.22E $1.26E 54.4
Mkt Cap: $49.8B EPS 2002 N/A N/A $1.68E N/A
FY: 9/30 Price Target $120 $120
Rank 1 1
*We look for wireless innovator QCOM to deliver solid 2Q01 results in line
with expectations on Wednesday 4/25. Expect
management commentary to be upbeat highlighting strength of QCOM's l-term
positioning. We reit our 1 Buy rating
*Expect QCOM to comfortably meet our consensus EPS est of $0.29 with sales
of approx $690-700M helped by solid chip shipments
of around 16M units
*Expect positive mgmt tone underlining: 1X upgrade cycle, steady expansion
of global CDMA markets & potential for QoQ uptick in
chip shipments throughout FY01 despite handset inventory worries
*Ahead of results, finetuning our ests for June & Sept Q's to reflect more
conservative assumptions for a) R&D investment b) QoQ
uptick in chip shipments. FY01 moves to $1.22 from $1.27, CY01 is $1.21.
*Catalysts remain more 3G licensing deals (NOK, ALA, Siemens), China orders,
1X rollout. QCOM continues to extend leadership in
wireless chip design & remains a top pick. Target is $120

COMPANY/INDUSTRY UPDATES
Commodity Chemicals S. Vasnetsov, .212.526.3212
Instead of flowers, spring brings drought in chemical
*On our recent research trip, we found that US chemical industry continues
to struggle with slow demand in April, contrary to
typically robust seasonal demand pattern. We expect recovery in chemical
demand only in late 2001, followed by improvement in
cash margins in early 2002.
*In the winter of 2000-01, the US commodity chemicals saw the worst
operating conditions since 1985.
*The hope was that conditions will improve in the spring 2001, as less
expensive oil and gas, coupled with more robust seasonal
demand, will help to improve both sales volume and cash margins.
*So far, this widely expected improvement has NOT happen, as our research
trip uncovered. We expect that on upcoming 1Q
conference calls companies will offer more cautious outlook for 2Q'01 and
for the entire year.

David C. Morris
Sr. VP Lehman Brothers
713-652-7112/800-227-4537
dcmorris@lehman.com

Disclosure Legend: A-Lehman Brothers Inc. managed or co-managed within the
past three years a public offering of securities for this company. B-An
employee of Lehman Brothers Inc. is a director of this company. C-Lehman
Brothers Inc. makes a market in the securities of this company. G-The
Lehman Brothers analyst who covers this company also has position in its
securities.
Key to Investment Rankings: This is a guide to expected total return (price
performance plus dividend) relative to the total return of the stock's local
market over the next 12 months. 1 = Strong Buy (expected to outperform the
market by 15 or more percentage points); 2=Buy (expected to outperform
the market by 5-15 percentage points); 3=Market Perform (expected to perform
in line with the market, plus or minus 5 percentage points); 4=Market
Underperform (expected to underperform the market by 5-15 percentage
points); 5=Sell (expected to underperform the market by 15 or more
percentage
points).
This document is for information purposes only. We do not represent that
this information is complete or accurate. All opinions are subject to
change.
The securities mentioned may not be eligible for sale in some states or
countries. This document has been prepared by Lehman Brothers Inc., Member
SIPC, on behalf of Lehman Brothers International (Europe), which is
regulated by the SFA. ?Lehman Brothers, Inc.


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 - MF April 23rd 2001.pdf