Cisco Is Finally Back in Front of Wall Street

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Cisco Systems Inc. (NASDAQ: CSCO) is one the few major technology companies that has still never recouped its share price from the dot-com bubble in 1999 and 2000. But now its shares are at roughly 18-year highs. While Cisco managed to rally after beating earnings expectations this past week, the reality is that Cisco is acting like a stock that is back out in front of Wall Street, rather than the other way around.

24/7 Wall St. covered the earnings report, but what stood out about Cisco was the raw number of analyst target price hikes afterward. One reason this is so important is that analysts already had handily been raising their Cisco price targets in the days and weeks ahead of earnings.

When you consider the wave of upgrades last year, it’s as if Wall Street has now entered into a third Cisco upgrade cycle. Cisco has turned back into a company that has finally retaken control of its own narrative.

When Cisco reported, the company posted $0.63 in earnings per share (EPS) on $11.9 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $0.59 in EPS on revenue of $11.81 billion. The same period of last year reportedly had EPS of $0.57 and $11.58 billion in revenue.

At the same time, deferred revenue was $18.8 billion, up 10% in total, with deferred product revenue up 19%, driven largely by subscription-based and software offers, and deferred service revenue was up 4%. The portion of deferred product revenue related to recurring software and subscription offers increased 36%.

Prior to the release of the earnings report, analysts were fairly positive on Cisco:

  • Citigroup had a Buy rating with a $46 price target.
  • Instinet also had a Buy rating and a $46 price target.
  • Goldman Sachs had a Buy rating and a $48 price target.
  • RBC had a Buy rating with a $44 target price.
  • KeyCorp had an Overweight rating and a $43 price target.
  • Barclays had an Overweight rating with a $45 price target.
  • Deutsche Bank had a Buy rating with a $45 price target.

And after earnings were released, analysts took this opportunity to hike their price targets:

  • Argus reiterated its Buy rating and raised its target to $50 from $44.
  • Barclays had an Overweight rating and raised its target to $50 from $45.
  • Berenberg had a Neutral rating and raised its price target to $40 from $33.
  • BMO has a Market Perform rating and raised its target to $43 from $36.
  • Deutsche Bank raised its price target from $52 to $55.
  • Instinet has a Buy rating and raised its target to $48 from $46.
  • Jefferies has a Buy rating raised its price target from $42 to $48.
  • Morgan Stanley raised its price target to $46 from $42.
  • Raymond James raised its target price to $50 from $44.
  • RBC has an Outperform rating and raised its target to $50 from $44.
  • Stifel has a Hold rating and raised its target price to $46 from $40.
  • Wells Fargo has a Positive rating raised its target to $52 from $47.

Shares of Cisco were last seen at $44.33, with a consensus analyst price target of $47.98 and a 52-week trading range of $30.36 to $45.09.