Cisco Rises As Analysts Turn Positive
Cisco Systems (NASDAQ: CSCO), a leading blue-chip technology stock, traded higher on Thursday after analysts at Goldman Sachs added the name to its Conviction Buy List. Analysts at Piper Jaffray also upgraded the stock from Neutral to Overweight with a $22.00 price target. Cisco has been under some pressure in 2012, falling a little less than 3 percent so far year-to-date.
The stock has been rising in recent weeks and is close to new multi-month highs. The 52-week range for the name is $13.70 to $21.30. During Thursday's trading session, Cisco has risen more than 2 percent, but has actually been falling on an intra-day basis after gapping higher at the open.
Analysts at Goldman Sachs have a $24.00 price target on the stock and see 40 percent upside in the name. They wrote, "we are adding Buy-rated Cisco to the Conviction List, as we believe its fundamentals are inflecting positively, with both our recent IT Survey and our just-published channel survey pointing to stronger than expected growth in enterprise networking, and switching in particular, as well as to a stronger competitive position for Cisco."
The analysts also said that they think the market is pricing in, "rapid margin degradation from the current 28%, which we view as unlikely."
The analysts at Piper Jaffray also cited favorable channel checks for the belief that fundamentals at Cisco are improving. They wrote, "based on proprietary channel checks, data points from distributors and our recent VARs survey, we believe Cisco will meet or slightly beat revenue expectations and tight cost controls should drive better than expected EPS results."
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