Credit Suisse Sees Solid Execution, Confident Tone From Cisco Systems

In a report published Thursday, Credit Suisse analyst Kulbinder Garcha reiterated an Underperform rating and $20.00 price target on Cisco Systems CSCO. In the report, Credit Suisse noted, "Revenues were above the Street's estimates at $11.9bn (7% y/y, -2.5% q/q), with GMs at 61.7%, better than expected. Guidance was also reassuring with revenues at $12.0bn and EPS of $0.52 at the midpoint. While it's worth noting that such results come against a period of easy comparisons, we believe that execution has been solid. We raise our FY15/FY16 EPS estimates by 4%/3% to $2.13/$2.02 and acknowledge that near term, the shares may perform well. However, we still believe that the secular impact of SDN will become more meaningful over the next 12-18 months, and retain our UNDERPERFORM rating." Cisco Systems closed on Wednesday at $26.93.