Cisco Systems, Linear Technology: A Take And A Toss In The Tech Sector - Cisco Systems (NASDAQ:CSCO)

Analysts at Bank of America reiterated their Buy rating for Cisco Systems, Inc. CSCO on Friday, December 19, setting a price target of $30. On the same day, the research firm downgraded Linear Technology Corporation LLTC from Buy to Neutral, but boosted its price target from $45 to $49.

Despite the dissimilar ratings, the upside potential implied in both these stocks is comparable: around 8 and 7 percent, respectively.

The Take

Other research firms also seem quite fond of Cisco. On December 9,

Wedbush

initiated coverage on the stock with an Outperform rating and a $31.50 price target. In the previous week,

UBS

had reiterated its Buy recommendation of the stock, setting a price target of $30.50.

In addition, on December 11, R. W. Baird analyst Jayson Noland also reiterated an Outperform rating for Cisco, and raised his price target to $32 from $29.

Also appealing to investors, the company declared on December 11 a $0.19 per share quarterly dividend payable January 21 to shareholders (of record as of January 6, 2015). The yield now stands around 2.8 percent.

The Toss

On Friday, December 19, Bank of America downgraded Linear Technology, setting a $49 price target

based on

“20x FY16E PE or approximately 12x EBITDA, right at the mid-point of the 5 year valuation range.” Although analysts like the company’s prospects, management team and asset base, they said they believe the stock’s valuation already reflects much of the upside.

More bearish is Citigroup, which reiterated a Sell rating for the stock on December 18, fixing a price target of $39, well below the current stock price of approximately $45.75.

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