Networking products giant Cisco Systems, Inc. (
) 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
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 (
) 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. (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.3 out of 5 stars.
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