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Cisco Is Trading at a Discount of 11% to Target Estimates

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May. 17 2018, Published 2:51 p.m. ET

Historical stock returns

Cisco Systems (CSCO) stock has returned 32% in the last 12 months. The stock has risen 4.3% in the last month and fallen 1.9% in the last five trading days. The stock fell over 3.5% in after-hours trading on May 16. Cisco stock rose 15% in 2016 and 31% in 2017. Year-to-date, it has risen ~18%. Peers IBM (IBM), Ericsson (ERIC), Nokia (NOK), and Microsoft (MSFT) have returned -6%, 13%, -0.6%, and 40%, respectively, in the last 12 months. The S&P 500 (SPY) and the PowerShares QQQ ETF (QQQ) have generated returns of -0.5% and 7.4%, respectively, in 2018.

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Analysts’ recommendations and price targets

Of the 33 analysts tracking Cisco, 24 recommend a “buy,” nine recommend a “hold,” and none recommend a “sell.” Thus, over 72% of analysts recommend a “buy,” and approximately 28% recommend a “hold” on the stock.

Analysts’ 12-month average price target for Cisco is $49.67, and their median estimate is $50. Cisco is trading at an 11% discount to analysts’ median estimate.

Moving averages

On May 16, Cisco closed the trading day at $45.16. Based on that price, the stock is trading:

  • 5.8% above its 100-day moving average of $42.67
  • 2.7% below its 50-day moving average of $43.98
  • 0.6% above its 20-day moving average of $44.90
  • 49% above its 52-week low of $30.36
  • 2.6% below its 52-week high of $46.37

Relative strength index

Cisco’s 14-day MACD (moving average convergence divergence) is 0.60. A stock’s MACD marks the difference between its short-term and long-term moving averages. Cisco’s positive MACD indicates an upward trading trend.

Cisco has a 14-day RSI (relative strength index) score of 58, which suggests that the stock is between the oversold and overbought territory. An RSI score above 70 suggests a stock has been overbought, while an RSI score below 30 suggests it has been oversold.

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