In a report released yesterday, Ittai Kidron from Oppenheimer reiterated a Buy rating on Cisco Systems (NASDAQ: CSCO), with a price target of $36. The company’s shares closed yesterday at $33.82, close to its 52-week high of $34.60.
Kidron wrote:
“Cisco reported solid April-quarter results but offered weak guidance for the July quarter, primarily on the revenue front. The weak macro backdrop is nothing new (emerging markets, UK, etc.) but incremental weakness was noted in the Public and Service Provider verticals along with added headwinds from the transition to a recurring revenue model. Overall, while the demand environment is mixed, we feel that Cisco is executing well and keeping costs/margins stable. The continued push towards subscription-based solutions will likely weigh on revenue growth for quarters/ years to come, and we wouldn’t be surprised to see further revisions near term. Nevertheless, we believe that the shift presents long-term economic upside to Cisco, and meanwhile a strong balance sheet limits downside. Lowering estimates to reflect outlook.”
According to TipRanks.com, Kidron is a 4-star analyst with an average return of 2.9% and a 53.5% success rate. Kidron covers the Technology sector, focusing on stocks such as Hewlett Packard Enterprise, Advanced Micro Devices, and Riverbed Technology.
Currently, the analyst consensus on Cisco Systems is Strong Buy and the average price target is $37.73, representing an 11.6% upside.
In a report issued on May 2, Credit Suisse also maintained a Buy rating on the stock with a $40 price target.
Based on Cisco Systems’ latest earnings report for the quarter ending April 30, the company posted quarterly revenue of $11.94 billion and quarterly net profit of $2.52 billion. In comparison, last year the company earned revenue of $12 billion and had a net profit of $2.35 billion.
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