Cisco Gains as Analysts Come Running

Analysts at

Merrill Lynch

are defending

Cisco Systems

(CSCO) - Get Report

, saying sources and channel checks indicate the networking giant is unlikely to issue an earnings warning at this point in the quarter.

On Tuesday, Cisco's shares fell $1.36 a share to $14.82 in extremely heavy volume as rumors circulated that it would preannounce a disappointing third quarter.

According to Merrill, sources and channel checks show Cisco is executing effectively in a poor IT-spending environment, although the final weeks of the quarter will be crucial. Another firm, Needham & Co., upgraded the stock to a buy from hold and raised its price target to $18 a share.

The positive comments were lifting Cisco's shares in the premarket session. On Island, they were recently gaining 35 cents, or 2.4%, to $15.17.