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When you're a kid with an upset tummy, throwing up can make you feel better. Analysts took the same line on



latest earnings warning, viewing the company's nearly $2.5 billion charge the company announced as a necessary act that could mark the end of an illness.

The networking giant yesterday after the close announced

an inventory write-off of $2.5 billion and said revenues would be

down 30% from the previous quarter. But, despite the horrible sales figures and massive inventory overhang,

Goldman Sachs'

Nathaniel Cohn this morning told his clients the worst is probably over. Cisco, he said, will feel better from here on out.

"It is more likely that news flow from here becomes incrementally more positive or less negative, depending on how one looks at it," Cohn wrote this morning. "As a result, we could see the stocks begin to trade higher through the coming quarter as inventory continues to get worked through and demand begins to uptick slightly from these depressed levels."

Essentially, that's the going logic emanating from many analysts on the morning after.

W.R. Hambrecht's

Jim Liang told investors to take a "buy on weakness" approach to the sector and wait for an industry upturn at the end of the year.

Lehman Brothers'

Tim Luke told investors he believed "the shares may trade modestly higher in coming days as investors sense a trough." But he added that "Cisco has not yet seen concrete signs of improvement."

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Many analysts, including Luke and

Credit Suisse First Boston's

Lissa Bogaty, adjusted earnings estimates lower to reflect the latest guidance from Cisco. Luke, who rates the company's stock at buy, dropped his 2001 earnings-per-share target to 41 cents from 47 cents. And he cut his 2002 estimate to 34 cents from 51 cents. Bogaty, who also rates the stock at buy, halved his 2002 earnings estimate for the company to 22 cents from 45 cents. "We hope we have cut for the final time," Bogaty wrote.

But unlike some of her peers, Bogaty does not believe the stock will make much in the way of gains going forward. There is nothing, she said, "visible to make it go up, but possibly no more bad news to make it go down. Back to a trading range, in our view."

That trading range? Tough to tell. The stock is off more than half from the beginning of the year and has only recently begun making gains. After hitting the high $13s two weeks ago, it rose to the about $18 during last week's rally. Its 52-week high is $71.87.

But the last few times Cisco began a solid attempt to rally, more bad news thwarted those attempts -- even as analysts then said the worst was perhaps in the rearview. A late January run-up was crushed, as were minor attempts at gains in February and March.