UPDATE: Wedbush Downgrades Cisco Systems to Neutral, Lowers PT on Deteriorating Fundamentals

In a report published Thursday, Wedbush analyst Rohit Chopra downgraded the rating on

from Outperform to Neutral, and lowered the price target from $26.00 to $23.00. In the report, Wedbush noted, “We are downgrading shares of Cisco to NEUTRAL as we no longer hold the view that Cisco's product breadth and geographic balance will insulate investors from a multitude of challenges that should persist for several quarters, raising our doubts about the ability of the company to deliver on its long-term targets. Despite a bottom-line EPS beat, fundamentals at Cisco are deteriorating as evidenced by the Q1 revenue miss and a surprisingly weak Q2 guide. Unfortunately, the decline in momentum is due to a combination of macro, execution, competitive and product transition challenges that we think will last for several quarters – with no visibility on improvement. We believe the challenges Cisco faces with SP product transitions raise concerns about the company's ability to manage one of the more evolutionary changes in networking with the new SDN switching platform, which is likely to create long pauses over the next several quarters. Given the duration and magnitude of these challenges, we see ongoing risk to the story and think the stock will remain range-bound, unable to outperform the group. We advise investors to move to the sidelines.” Cisco Systems closed on Wednesday at $24.00.