Good Friday Morning - Comments From The Local Guys!
Over the years, we have tried to use this letter for purely business
purposes and not to push any personal agenda. However, now is the time to
make some personal comments.
Everyday, we find it difficult to comprehend what we saw on that fateful
Tuesday morning. The enormity of the what was done, with out regard to life.
Nothing! Who could plan such a thing. Who would! It is hard, very hard, to
conceptualize what they did. What type of mind would think to do such a
thing. And then have others who would agree that it was a good idea! What
type of people. And the cheering!
We think of our fellow Americans (and others) who perished. And the hero who
gave their lives on the plane and on the ground. We think of the heroes who
did not give their lives.
We think of the friends that we never met! The friends that we now will
never meet. How could humanity do what was done. We think of our business
associate Ira Zaslow, who is missing. Our thoughts are with his family. We
think of all those who lost their lives. We think of their families. Lives
snuffed out by people consumed with hate. And not only lives lost last week.
We think of the missing generations to come. Those generations that will
never be! Oh, the waste - for what!
Rally around America. Rally around Democracy. Rally around what is right!
There is no equivocation about Right and Wrong! Life is sacred! Those who
disregard life, are the ones who will be condemned for eternal damnation!
There, it has been said.
The following comment was written yesterday, but was never sent.
The bottom line is go out, buy stocks and go out and buy in the shops and
malls. And light a candle to never forget!
"The market is very oversold. We are seeing many technical readings similar
to those we saw at the bottom of the markets in 1987, 1990, 1994 and 1998.
These are very strong signs of market capitulation. For example the VIX
(volatility) Index is at a peak that is normally seen at market bottoms.
Short Interest is at record levels - a good sign. Money Market assets (the
amount of cash on hand), is almost equal to 19% of the entire capitalization
of the stock market - a very high degree of liquidity.
The number of market advisors who are negative on the market, is now greater
than the number who are positive on the market - a traditionally bullish
The PUT/CALL ratio has been very, very high all week - at turnaround
The Fed. has reduced rates now 8 times and liquidity in the system is high.
Inflation is low.
Just when the market is NOT expected to rally, it will. That is the nature
of a bottom.
Let's hope that all these technical readings turn the market sooner rather
than later. Now is the time."
Natural Gas Peggy Connerty
A Safe Harbor in a Storm
We continue to believe the Master Limited Partnership sector will remain a
safe harbor for
investors as the economy teters on the brink of a recession.
Given the possible recessionary environment, Monday's 50 basis point cut in
the federal funds rate (now
3.0%), and the relatively few alternative investments available, we continue
to be bullish on the MLP
MLP's in general are defensive in nature, provide income and have decent
growth prospects. The cash
distributions on most MLP's are protected with solid coverage ratios (with
distributable cash averaging
115% of cash distribution). Therefore, we believe the MLP sector should hold
up during this time of
economic and political crisis.
Please refer to our note titled "Weak Economy, Low Interest Rates Bode Well
for MLP's" published
September 11, 2001.
PC Software - Microsoft Michael Stanek
Trimming Estimates to Match Reality
Trimming estimates to match reality
We are cutting our estimates for FY02 from of $28.8B to $27.7B in revs and
EPS from $1.93 to $1.86.
Microsoft has never been as well positioned as it is today.
Overall we have made the majority of our cuts in the December and balance of
the Q's in '02.
The stock is down in the wake of sliding economic conditions, and
exacerbated this recent tragedy.
Imaging Technology - Eastman Kodak Caroline Sabbagha
Tweaking Revised Estimates
With a little more information and insight, we are tweaking our estimates
for 2001 and 2002. For
FY01, our estimate is now $2.60. For FY02, we are lowering our EPS estimate
to $3.20. We maintain
our 3 Market Perform rating.
We think the issues at Kodak are more than just the economy. They include a
technology transition and
competitive pressures in its traditional businesses.
We are also beginning to get concerned about cashflow and therefore expect
the balance sheet to be
weaker than had been anticipated.
We think the stock should settle in the mid-$30s with the 5% dividend yield
acting as a support for the
New Media/E-Commerce - Amazon Holly Becker
We expect AMZN, like most retailers, will suffer from the current political
unrest. This leads us to
believe that even the low end of guidance of $625-$675mm in revenues may be
difficult to achieve.
Our 4Q ests. for breakeven operating profits and $900mm in cash hinge on our
4Q sales est. of $1.1 B.
While it is too soon to tell, we will likely need to revisit these ests. in
the upcoming weeks.
About 6 weeks ago, AMZN lowered its book prices by approx. 10%. While this
was likely successful in
increasing demand, the recent catastrophe in the U.S. will obviously offset
On Sept. 11, AMZN announced a 5-yr alliance with Target Corp. in which AMZN
will open a Target store at
Amazon.com later this fall and power all of Target's online sites beginning
in summer 2002.
While financially this agreement will be small, we see several strategic
opportunities, which include
expanding into new categories, enhancing direct vendor relationships and the
possibility of utilizing
Target's physical locations.
New Media/E-Commerce - eBay Holly Becker
Well Positioned to Sustain Growth
eBay's business appears to be relatively unscathed by the current political
and economic events.
q On Sept. 18, eBay articulated they are comfortable with 3Q consensus of
$186 mm in rev. and $0.11 EPS
(our ests. are $185 mm in rev. and $0.09 EPS).
eBay's listings dropped 30% on Sept. 11, however, the company expects
listings and sales to recover to
pre-Sept. 11 levels in the next few days. We estimate eBay suffered from 1-2
days of lost sales.
Separately, the company announced ambitious plans to raise $100 mm in 100
days in response to the
recent disaster at the World Trade Center.
Dubbed "Auction for America," the campaign enables sellers to list items on
eBay, with resulting proceeds
to be donated to various relief efforts.
The stock is down over 15% since Sept. 11 and is likely to bounce in the
near term, however we remain
cautious given its still rich valuation.
Semiconductor Capital Equipment - Applied Materials Edward
Announces Layoffs of ~10% Global Workfor
Industry weakness and the events of last week have forced AMAT to change its
strategy and join
its peers in announcing layoffs. We maintain our 1 Strong Buy rating but are
cautious on the
shares near term, given reduced visibility and the fact that shares are
trading at a premium to
historical trough levels.
In an important change in direction, Applied this morning announced layoffs
of ~2,000 employees, roughly
10% of its global workforce. Layoffs will result in a 4Q01 restructuring
charge of an unspecified amount.
Since the last conference call the economic and semiconductor industry
climate has continued to worsen.
This, along with the traqic events of last week, have left AMAT with zero
visibility. No immediate disruption
in business has occurred, the company does expect some indirect impact.
AMAT remains committed to R&D and Field Support Engineers, and this should
help the company ramp
up quickly in the next upturn.
COMPANY / INDUSTRY UPDATE
Wireline Services - Verizon Communications Blake Bath
Achieves PA 271 Approval on Schedule
VZ Achieves 271 PA Approval on Schedule; Opens a $5.5B Market and brings its
total approvals to
4 states (NY, CT, MA, PA). VZ is the clear leader in 271 approvals and has
versus its public guidance in this regard. 271 entry is expected to add 63
bps to '02 total revenue
growth and 84 bps to '02 growth. LD-entry is a major catalyst for VZ and
current valuations are
cheap in the context of the contributions this catalyst should provide for
the company. Reiterate 1-
VZ received 271 approval in PA on 9/19, in line with our forecasts, opening
a $5.5B LD voice/data market
The company also announced that it expects to file with the FCC for 271
approvals in NJ, NH, VT, and RI
between Nov/Dec '01, putting it on schedule for approvals in these states
between Feb/Mar '02.
In total, the PA approval and the upcoming 4 state approvals are expected to
open a $12.7B market to VZ;
in total, by mid-year '02, we expect VZ to be marketing to a new $33.1B LD
market (within the BEL region);
VZ is the leader in 271 approvals.
NOTES FROM TODAY
Cosmetics; Household & Personal Care - Rayovac Ann Gillin Lefever
Discretionary Spending Grinds to a Halt
Rayovac's halved earnings expectations for the current quarter suggest both
discretionary spending has ground to a halt; and that the retailer is
battening down the hatches by
postponing (and potentially cancelling) orders to further cut working
As we noted yesterday, consumer staples companies tend to outperform during
periods of economic
stress. However, today's news confirms that those with discretionery
spending exposure are less likely to
participate with strong relative earnings growth. We remain concerned about
Gillette's, Energizer's and
Rayovac's exposure to batteries (where we estimate that discretionery
spending is circa 60% of trend
growth) as well as Gillette's exposure to a razor trade up strategy.
Our earnings estimates for ROV change from $1.28 to $1.03 for FY 01 (Sept.)
and from $1.50 to $1.15 for
FY 02. Our FY 02 estimates are $ 0.10 - $0.15 below management's guidance
due mostly to a more
cautious view on battery category growth. Our target has been reduced to $17
and we maintain our Buy
Gaming & Lodging - Hilton Group Joyce Minor
Company Outlines Post-Attack Outlook
Yesterday, Hilton hosted a conference call to update the investment
community on the state of the
company and its operating outlook subsequent to the terrorist attacks of
Although no specific guidance was given, the company is hoping that poor
travel trends last just 6-
12 weeks, followed by a return to normalized travel trends, albeit at a
level stepped-down to 1998-
1999, not the better 2000 trends. If EPS is a guide, note that 1999 EPS of
$0.60 is -17% below our
pre-attack 2002 EPS estimate. Investors that concur with Hilton's hypothesis
that travel fears will
be short-lived should probably buy the stocks at these levels. For those,
like us, that are
concerned that additional events could prolong or renew travel fears, it may
be too early to check
in to the lodging sector.
Restaurants - Darden Restaurants Mitchell Speiser
Beats Consensus/Conf Call at 2pm
An aging consumer, lower seafood costs, less dilution from new concepts &
Repo will occur
despite a weaker economy; So our FY02E EPS remains <15%. So now at 12.4x,
near a 2-yr low,
maintain 1-Strong Buy rating.
FY1Q EPS was $0.01 <St. & 0.02<our view on Comps of 4.2% at Olive Garden
(OG) & 3.2% at Red
Lobster (RL), both <our 2.5-3% view. June/July known so Aug drove Upside w/
Comps of 7-8% at OG, #1
of its Peers & <category grth of 2-3% at RL
Mntn above-St. FY02E EPS of $1.86, +17%, essentially a $0.02 cut on a slower
Casual Dining more vulnerable than Fast-Food as people are glued to the TV &
lamenting last week's
events. So Sep Comps likely weak, perhaps down
Shrs -11% since last Tues vs S&P -7% so mkt discounting weaker outlook. Now
at 12.4x, Mntn 1
Oil & Gas: Exploration & Production Thomas R. Driscoll
Natural Gas Storage
This week's natural gas storage injection of 90 Bcf was slightly stronger
than our 85 Bcf
Oil Services & Drilling - Tidewater James Crandell
Lowering Fiscal 2002 and 2003 EPS Estima
The moderating activity in the Gulf of Mexico is negatively impacting
Tidewater's earnings more
than we previously expected. We continue to believe that improving
international activity and the
start-up of new vessel contracts will partially offset this domestic
moderation. Given that the stock
is currently 50% below its current-cycle high and trading at attractive
levels on anticipated
earnings and cash flow, we believe that the stock is attractively valued at
We are again lowering our fiscal 2002 and 2003 earnings estimates to $2.45
(from $2.65) and to $2.65
(from $2.95) to reflect lower-than-expected domestic vessel utilisation
which will lead to downward
pressure on day rates. This follows a earnings reduction last week.
We believe that domestic utilisation will remain weak over the next four
Domestic day rates have remained steady to-date but will likely start to
erode in the fourth quarter.
Power - NRG Daniel Ford
NRG Reaffirms Earnings Expectations
We continue to believe that NRG is the most defensive investment in the
IPP/Merchant Sector. We
maintain our Strong Buy with a $23 price target.
In light of last week's tragedy and continued market skittishness regarding
power supply fundamentals in
front of negative GDP predictions, NRG management issued a release to
reconfirm its $1.35 EPS
guidance for 2001 followed by 25% annual growth in 2002 and beyond.
Further management indicated that it terminated its efforts to close on the
Wisvest acquisition (1051MW)
due to insurmountable regulatory hurdles.
We continue to be confident in our 2001 and 2002 EPS estimates for NRG of
$1.40 and $1.78 given
management's conservative and disciplined business approach. This has
enabled the company to time
and time again stand by earnings expectations despite the ever changing
Power Daniel Ford
Electric Utilities and Power Weekly
We are previewing the events of the upcoming week of September 24, 2001
We look for the New Jersey BPU to approve the FirstEnergy/GPU merger on
September 26. We also
provide a list of some potential post-merger closing international asset
Parties in New Jersey could submit testimony regarding the Potomac Electric
(POM, Market Perform;
$21.77)/Conectiv (CIV, Market Perform, $23.05) merger proceeding early next
Power - DTE Energy Gregg Orrill
Another Good Yield Hog Story
As an integrated utility with a 4.8% yield, DTE should do well in a
recessionary backdrop. Below
we review the DTE outlook and reiterate our $48 price target which is 11.25x
DTE is well positioned to do well in the current environment with a
traditional utility focus, a stock buyback
authorization, and a short power position.
DTE had $150M left on the current stock buyback plan and a lingering 10M
Industrial sales are down 10% Y-T-D. However, the lower margin earned on
these customers and DTE's
short position make this a positive impact on the company.
Offsetting factors include lower pension income and outlook for Plug Power.
We reiterate our EPS estimates of $3.54/$4.26 for 2001/2002 respectively.
The MCN acquisition and fuel
cost timing weight more income to Q4 vs. Q3. We look for $0.40-$0.50 in Q3
and $1.60-$1.70 for Q4.
Power Technology - Thomas ONeill
CT DPUC Draft Draws a Blank
CT DPUC releases draft decision that denies FCEL 26MW project entirely.
Reducing shares of
FCEL to Market Perform from Strong Buy due to lack of material catalysts and
Late Wednesday, the CT DPUC issued a draft decision that denied funding to
an ENE/CRRA proposal that
would have resulted in a 26MW order for FuelCell Energy.
While the draft decision could be adjusted to provide funding in a final
decision (early Oct), the wording of
the order appears to point the companies towards additional state funding
vehicles, which would likely take
multiple months to tap and would be speculative at this point.
We believe the disappointing CT DPUC draft decision leaves shares vulnerable
to the downside ($8/share)
and likely caught in a lower trading range until sub MW and MW "launch size"
order flow can be generated.
That said, FCEL's $7/share of fully diluted cash and leadership in carbonate
technology should limit
downside even in the current market environment.
Banks - First Virginia Banks Kristin Nemec
Although credit experience has been excellent we remain cautious in our
outlook due to the
consumer exposure and lower than average net income growth. FVB is rated
We carry an operating estimate of $0.78, in line with consensus. No change
in our estimates of $3.10 and
$3.35 for 2001 and 2002, respectively.
The balance sheet dynamic is driven by management's decision to pull back in
the indirect auto business
by simply pricing less aggressively. Due to a pullback of many competitors
and the rate environment, we
believe spreads have widened in the indirect business.
We expect the near term expense progression to be minimal.
Banks - Bank One Henry Chip Dickson
Third Quarter Preview
We continue to rate ONE 3 - Market Perform. The deteriorating economic
cause further downward earnings revisions for ONE, as well as pushing out
the inflection point
when the company really begins to establish EPS momentum. We are also
reducing our target
price $5 to $35.
Given the deteriorating economic environment, we are reducing our estimates
for ONE - assuming higher
credit costs and modestly lower levels of revenue.
For 3Q01, we expect ONE to report $0.60 during the week of October 15. This
represents a reduction of
$0.04 from our previous estimate.
For 2001, we are lowering our estimate $0.10 to $2.40. For 2002, we are
lowering our estimate $0.15 to
$2.75. New GAAP EPS should be $0.03 - $0.04 higher in 2002. We do believe
our 2001 estimate is on
the conservative side.
Biotechnology Joseph Dougherty
Discovery Collaboration with Takeda
The agreement calls for the development of small molecule leads against a
target proprietary to
Takeda. We view this deal as a significant positive for Array, featuring
both excellent deal
structure and potential for future expansion.
This is Array's 4th significant collaboration in the past 2 months that is
tied to potential downstream
revenue participation. We point out to investors that company management had
guided us to expect a
total of 3 royalty-based deals by the end of September, and this
announcement points to possible upside
to our numbers.
We note that Array's shares have sold off more severely than the biotech
group overall, although not to the
extent of some of their competitors. We believe the shares are very
attractive at these levels.
Biotechnology - ImClone Systems Michael Wood
IMCL Signs Strategic Agreement w/BMY
Deal with Bristol Myers will provide $1.0 billion in cash and access to
world class oncology
ImClone announced that it has signed a major strategic partnership with
Bristol Myers to commercialize its
lead drug IMC-C225.
ImClone will receive $1.0 billion in upfront and milestone payments. Bristol
Myers will take responsibility for
sales and marketing and will pay ImClone a royalty on net sales.
We are changing our EPS forecasts from ($1.03) loss to ($0.91) loss in 2001,
from ($0.46) loss to $0.16 in
2002, from $0.41 to $0.88 in 2003 and from $1.41 to $1.54 in 2004. We are
instituting a new EPS estimate
of $2.05 in 2005. These latter numbers are fully taxed.
Lehman Brothers acted as financial advisor to Bristol Myers in connection
with this transaction.
Major Pharmaceuticals - Lilly, Eli Charles Butler
SOLD! Oritavancin Out-Licensed to ITMN
Yesterday, LLY announced that InterMune had acquired worldwide rights to
Phase III compound under development for complicated skin infections and
bacteremia. We had
anticipated a potential 2004 launch for this compound, thus we are not
changing any near term
revenue or earnings estimates.
The agreement provides InterMune with exclusive worldwide rights to develop,
We understand from LLY that NPV analysis supported the licensing of
oritavancin to another party versus
the continued development of this molecule internally.
Additionally, LLY's stable of late stage compounds is extensive. Arguably,
"licensing oritavancin to
InterMune will allow LLY to maximize the full potential of this innovative
compound while the company
redirects its internal resources to other late-stage pipeline opportunities
Health Care Facilities - Tenet Healthcare Adam Feinstein
Lehman Key Takeaways
THC pre-announced last night that it will exceed est for the recently
completed Aug qtr with a
suggested EPS range of $0.65-$0.67 range, vs our est of $0.63 and the street
consensus of $0.61.
Tenet continues to benefit from accelerating revenue growth trends, improved
cashflow generation, and
debt reduction initiatives.
We note that this news was widely expected by us, as well as others for the
past several weeks. However,
the magnitude of the upside was above our estimate.
The catalyst for this announcement was a desire to repurchase shares under
its share repurchase
We are raising our FY '02 est to $2.83 from $2.80 and we are upticking our
FY '03 est to $3.30 from $3.24.
Autos & Auto Parts - Visteon Corp Darren Kimball
Pre-Announces 3Q01 EPS
VC pre-announced 3Q01 EPS of -$0.46 to -$0.53, compared to our previous
estimate of $0.05,
prompted by Ford's recently announced third quarter production cancellation
units. This large earnings shortfall implies a steep variable contribution
margin from lost Ford
revenues, estimated at 35%, which is not particularly surprising given the
sudden and dramatic
nature of the production cuts.
For the time being, we are lowering our 2001 EPS estimate from $0.95 to
$0.40 and our 2002 EPS
estimate from $1.40 to $0.95. The potential for additional Ford production
cuts in 4Q01 may lead us to trim
VC's high degree of earnings sensitivity to production volumes, resulting
from the supplier's substantial
operating leverage and depressed margins, makes it one of the most
vulnerable automotive suppliers to a
protracted economic slowdown.
Business & Professional Services - Cintas dam Waldo
Soft F1Q02; Cutting F2002 and F2003 Est
On September 19, CTAS reported F1Q02 (ended August) revenue of $564.6
million (up 8.2% and, we
estimate, 5.7% organically) relative to our forecast of a 10.5% rise on a
reported basis and an 8%
gain organically. EPS of $0.33 rose 10.6%, $0.01 below our estimate and
in-line with Street
F1Q02 marked Cintas' the third straight quarter of decelerating top line
gains in a slowing U.S. economy.
CTAS' two principal drivers of the velocity of top line growth are the pace
of GDP and employment growth,
both of which continue to soften.
Trading at 28 times our new fiscal 2002 EPS of $1.44, 31 times our fiscal
2002 free cash flow forecast, and
a trailing EV/EBITDA ratio of 14.3 times (private market value range of
7-11), we think CTAS is fully valued
despite a "defensive" 60% recurring revenue model.
With management following strategies for longer-term shareholder value
creation (nicely improving internal
unit growth, unit pricing, and capital efficiency), we would be buyers in
the low $30s.
Electrical Equipment - W.W. Grainger Robert Cornell
Review GWW's August '01 Sales/Outlook
Branch Margins Still The Key
q Grainger's August sales were off modestly, but did not weaken
significantly beyond July sales trends.
North American economic weakness continues to impact sales while seasonal
Branch saw moderate sales decrease. Company helped by diversified customer
maintains margin targets.
q Digital sales continues to improve to $460 million annualized run rate.
Grainger.com increased run rate to
We are maintaining our 2001 EPS estimate of $2.25 and 2002 EPS forecast of
$2.70, which suggests a
20% gain. Price target at $50.
Electrical Equipment - SPX Corp Robert Cornell
Our 2002 earnings number remains $7.50
Stock looks oversold at current levels
SPX's INRANGE subsidiary guides revenues down and points to a potential $4
million in freight forwarding
Worst case scenario looks to be a $0.15 impact to SPX's 3Q01 earnings.
Cost cutting initiatives as well as United Dominion integration savings
could help support bottom line
We are maintaining our $6.50 2001 EPS estimate and our $7.50 2002 EPS
Machinery - Caterpillar Joel Tiss
CAT shares have declined over 20% during the past few weeks from $56, yet we
are still waiting
patiently to buy trying to minimize downside risk.
It is difficult to ascertain if recent events will change the long term
construction trends as economic
weakness may accelerate potentially setting up recovery in late 2002-03.
spending should remain strong.
Downside risk in shares remains $30. We would be much more interested in
buying below $40 and would
become more aggressive in the low to mid $30's. However, nibbling in the low
to mid $40's may not be the
Believe upside stock potential remains $65-70, mid decade, based on $6.50
peak EPS - however timing of
peak earnings is more of a question than levels.
Advertising & Marketing Services Kevin Sullivan
Global ad stocks continue to come under pressure following last week's
attacks on "Old Glory".
The sell-off creates a compelling investment opportunity among the stronger
names such as
Last week's events came at a difficult time for media stocks -- the ad
market was still weak and consumer
and business confidence was rocked -- both key elements in the resurgence of
Consensus estimates have become that much more challenging. For the ad
holding companies, we
believe the near-term impact is minimal since the vast majority of the
group's revenues are fee-based.
However, the potential for additional pullbacks in ad spending further
supports our belief of downside risk
in 4Q/'02 estimates.
Valuations have largely already adjusted for this risk, in our view. Our
favorite name continues to be OMC,
which is trading at less than 9x our '02 EBITDA estimate. The stock appears
to be discounting the worst
and we would recommend investors use the weakness as an opportunity to
Entertainment - Disney Stuart Linde
Keeping It All in Perspective-Balancing
We believe that at current levels, Disney encapsulates most of the downside
risk of the U.S.
recession and the terrorism threat. As opposed to its peers, Disney has the
added risk of a decline
in domestic and international travel to its theme parks.
About 80% of the company's EBITDA is generated by theme parks and
broadcasting. The theme parks are
about 40% of DIS' annual EBITDA. In 1991, theme park EBITDA dropped 30%.
We believe the studio and consumer divisions could offset some of the loss.
The studio will be bolstered by
releases such as Monsters Inc., (in Nov.) and continuing DVD sales propelled
by the Platinum Collection.
In this difficult period people need entertainment and fantasy especially of
the wholesome, uplifting,
signature Disney genre.
While the stock has begun to discount lower 2002 expectations. Investors are
looking to identify downside
support for ent. cos such as DIS. In our sensitivity analysis, we have used
a trough multiple of 10x and
varied EBITDA by $200 MM increments. If we assume EBITDA declines 20% to $4
Bil, the trough on the
stock using this analysis is $15.
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
outperformthe 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)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
SIPC, on behalf
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