Jefferies Rockets Cisco To Buy, Claims: 'Here's The Entry Point'

• Shares of Cisco Systems, Inc CSCO are down 17 percent year-to-date and currently trading near their 52-week low of $22.46.
• Jefferies’ George C. Notter upgraded the rating on the company from Hold to Buy, while raising the price target from $26.00 to $27.50.
• The recent decline in Cisco’s share price makes the risk reward attractive, Notter said.

Analyst George C Notter mentioned that the recent decline in Cisco’s share price makes it an attractive investment. “Our upgrade is driven, in part, by our view that the downside in the stock is limited,” the analyst said.

Cisco is poised to benefit from any improvement in the macro environment, but in case the situation worsens, the company is capable of protecting its earnings power by managing its cost structure, Notter wrote.

The analyst mentioned that the concerns about the company’s BRIC-M exposure have declined. He added that several growth opportunities exist in the areas of Security and Hyper-converged storage.

Cisco’s efforts in the SMB space could also drive incremental growth in its business, the report mentioned. The analyst also sees additional potential for Cisco to increase capital returns to shareholders, including increased dividends.