Goldman Sachs analyst William Tanona says Lehman Brothers (LEH) yesterday posted a preliminary third quarter loss of $5.92 -- much worse than his $2.75 loss estimate. More importantly though, he says management did not successfully put to rest the issues that had been pressuring the stock, and with significant uncertainty remaining about LEH's future initiatives, he has moved to a neutral rating.

He notes that since he added LEH to Americas Buy List on Mar. 18, the stock has fallen 84%, vs. the S&P 500's 7.4% drop and a 3% decline for his coverage universe; over the past 12 months, LEH is down 87% vs. a 15% drop in the S&P 500.

He lowers his 6-month target price to $7 from $22.

CREDIT SUISSE CUTS KENEXA TO NEUTRAL FROM OUTPERFORM

Credit Suisse analyst Bryan McGrath says deteriorating macro environment and strengthening dollar have eroded growth from Kenexa's (KNXA) recurring revenue business.

He notes management's guidance for the remainder of 2008 was predicated on "verbal agreements" with customers that ultimately did not translate to signed contracts. He says failure to close these contracts, combined with the forex headwind from an appreciating dollar, resulted in the company lowering its revenue goals by about $12 million for the remainder of 2008.

McGrath cuts third quarter revenue and EPS estimates to $54.2 million and $0.35, respectively; he lowers 2008 revenue to $213.1 million and $1.54 adjusted EPS estimate to $1.43. He sees 2009 revenue of $219.2 million and cuts $1.81 adjusted EPS estimate to $1.47.

He cuts $25 price target to $18.