Cisco’s Rating, Target, Estimates Cut at Auriga (CSCO)


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Networking products giant Cisco Systems, Inc. ( CSCO ) on Friday caught a big downgrade from analysts at Auriga.

The firm said it downgraded CSCO from "Buy" to "Hold" and cut its price target from $23 to $19. That new target suggests a much smaller upside of 11% from the stock's Thursday closing price of $17.17.

An Auriga analyst commented, "While we continue to expect CSCO to improve its competitive positioning in edge routers (ASR9000) and high end switching (Nexus 7000) by fixing product glitches by 2FQ12, our analysis now shows that it will not be sufficient to significantly boost growth and margins as competition intensifies in other segments. Management's commitment to improve operations and defocus from non-core consumer segment is encouraging, but we still move to the sidelines until we see evidence of improved execution. We also reduce our FY12 estimates and bring down our 5 year revenue growth estimate to 7%-9% from our previous 9%-11."

Cisco shares were mostly flat in premarket trading Friday.

The Bottom Line
Shares of Cisco Systems ( CSCO ) have a 1.40% dividend yield, based on last night's closing stock price of $17.17. The stock has technical support in the $15 price area. If the shares can firm up, we see overhead resistance around the $20-$22 price levels.

Cisco Systems, Inc. ( CSCO ) is not recommended at this time, holding a DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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