In a research report released Friday, Oppenheimer analyst Ittai Kidron reiterated an Outperform rating on shares of Cisco Systems, Inc. (NASDAQ:CSCO), with a price target of $32, after the networking equipment and services giant released its quarterly earnings report for the first quarter of its fiscal year 2016.
Kidron observed, “Cisco reported solid October-quarter results, beating top- and bottom-line consensus with strong margins; however, order growth disappointed with guidance impacted by FX headwinds and the removal of the STB business. Overall, we’re encouraged by strong growth and positive commentary around security, collaboration, data center, and software and subscription-based solutions. However, the macro/FX headwinds have taken some of the wind out of Cisco’s sails this quarter and its ability to overcome them will be key over the next several quarters. Despite these headwinds, we remain positive and believe the company can execute better than competitors in the current environment.”
Bottom line, “Overall Cisco continues to execute well in a tough environment with macroeconomic headwinds and high competitive pressures in its core switching market. The company is transitioning its business model to more software/ subscription-based solutions, and in the meantime faces macro headwinds that we think will keep shares range-bound NT. We remain positive LT on the business transition.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ittai Kidron has a total average return of 0.7% and a 45.7% success rate. Kidron has a 12.8% average return when recommending CSCO, and is ranked #1761 out of 3842 analysts.
Out of the 30 analysts polled by TipRanks, 21 rate Cisco stock a Buy, 6 rate the stock a Hold and 3 recommend Sell. With a return potential of 19%, the stock’s consensus target price stands at $31.33.