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Sell-Side Views Pour In After Cisco's First Quarter

Cisco CSCO's Q1 Draws Out The Sell-Side Analysts

Cisco Systems, Inc. CSCO continues to be weighed down after a disappointing first-quarter earnings release where the company offered future guidance lower than analyst expectations. At time of writing, shares were down 5.04 percent at $29.98.

Sell-side analysts had plenty to say about one of Silicon Valley’s most notable companies.

BMO Capital Markets

BMO Capital Markets said revenue guidance disappointed and thus lowered estimates due to the diminished outlook. “The stock has typically performed well after revenue resets, and we expect the same dynamic this time around,” wrote BMO analysts Thursday.

BMO has a $33 price target on Cisco and maintains its Outperform rating.

Wells Fargo

Wells Fargo believes there is still some reasons for optimism despite the soft outlook Cisco provided in Q1. The bank highlighted several positives in the quarter, with enterprise orders up 5 percent, solid margins and deferred product revenue increasing 19 percent.

Wells Fargo did lower FY 2017 EPS estimates to $2.35 from $2.42, but maintains its Outperform rating.

JMP

Analysts at JMP signaled that Cisco is struggling with carrier slowdown. JMP indicated that Cisco’s results bode well for Arista Networks Inc ANET and Palo Alto Networks Inc PANW but point to share gains against FireEye Inc FEYE.

JMP maintains its Market Perform rating on Cisco.

Jefferies

Jefferies analysts stated that investors should take January’s guidance Cisco provided with a grain of salt. “The disruption in near-term sales associated with Cisco’s move toward SaaS/recurring revenue and their propensity to sandbag guidance from time to time,” said Jefferies. Analysts at Jefferies have lowered its FY 2017 revenue figures from $50.21 billion to $48.17 billion.

Jefferies maintains its Buy rating and $35 price target on Cisco.

Deutsche Bank

Deutsche Bank opted for the "glass half full" take on Cisco, believing the company will leverage the power of its strong balance sheet and cash flow to double down inorganically through new products.

The German bank maintains its Buy rating with a $37 price target.

Credit Suisse

Credit Suisse had a markedly different take, proposing that Cisco is “running out of levers” after disappointing revenue guidance. Credit Suisse maintains its Underperform rating with a target price of $25.

At final check before publication, Cisco shares were down 5.13 percent at $29.95 with less than 30 minutes left in Thursday's regular trading session.

DateFirmActionFromTo
Oct 2016Argus ResearchInitiates Coverage OnBuy
Sep 2016MKM PartnersDowngradesBuyNeutral
Sep 2016Deutsche BankMaintainsBuy

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