UPDATE: Credit Suisse Initiates Coverage on Cisco Systems with Underperform Rating, $21 PT Ahead of Expected SDN Impact

In a report published Thursday, Credit Suisse analyst Kulbinder Garcha initiated coverage on

with an Underperform rating and $21.00 price target. In the report, Credit Suisse noted, “Over the past year, Cisco has seen the benefits of improving execution, gross margin stability, and increased capital redeployment, all of which are to be applauded. However, the impact on the networking market from Software Defined Networking (SDN) architectures should be very real and accelerate over time, leading to further margin compression. We initiate with an Underperform rating and a target price of $21.” Cisco Systems closed on Wednesday at $24.80.