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No ‘Sell’ Recommendations for Cisco Stock after Its Q2 Results

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Analysts’ recommendations for Cisco

Of the 30 analysts covering Cisco Systems (CSCO), 20 have recommended “buys” on the stock, while ten have recommended “holds.” No analysts have given CSCO “sell” recommendations.

On February 13, the hardware giant reported its results for the second quarter of fiscal 2019. It exceeded Wall Street analysts’ estimates on both the earnings and revenue fronts amid economic and geopolitical unrest. Cowen and Company raised its price target on the stock to $62 from $59 following the company’s upbeat results.

Analysts have given the stock a consensus target price of $54.20 and a median consensus estimate of $54.00. Cisco is now trading at a 12% discount to its consensus median target estimate.

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Second-quarter update

Cisco’s upbeat report shows that the company has gained product orders driven by its software and services offerings along with newer versions of its existing hardware. The company’s Catalyst 9000 switches generated strong sales, which helped boost its networking gear business.

Cisco is focusing on software and cybersecurity offerings amid weakening demand for routers and switches. Companies increasingly prefer adopting the cloud services offered by companies such as Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL) in the United States and Alibaba (BABA) in China instead of building their own networks.

During the quarter, Cisco partnered with Amazon’s cloud unit, Amazon Web Services, and announced its acquisition of Luxtera for $660 million. On January 30, 2019, Cisco acquired a network infrastructure analytics company called Singularity Networks. Both purchases will close in the third quarter.

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