Baird analyst Jayson Noland was out with a research note on shares of Cisco Systems, Inc. (NASDAQ:CSCO), after reviewing Cisco’s most recent quarterly results. The analyst rates Cisco shares an Outperform with a price target of $35, which implies an upside of 12% from current levels.

Noland noted, “Gross margin continues to trend higher as productivity improvements more than offset product pricing declines in F16, similar to trends witnessed in F13-F15. We view this this as a clear positive relative to SDN concerns. Security continues to be prioritized as a key growth area.”

“In a recent earnings call (FQ3’16), management indicated that while they would continue to be opportunistic around key priority and growth areas, they would not expect M&A to be quite as fast paced. We believe the announcement this week regarding the pricing of $6.25 billion in debt was planned given the $4.1 billion in debt due to mature in March,” the analyst added.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jayson Noland has a yearly average return of 9.9% and a 60% success rate. Noland has a 17.2% average return when recommending CSCO, and is ranked #484 out of 4151 analysts.

Out of the 32 analysts polled by TipRanks, 20 rate Cisco stock a Buy, 11 rate the stock a Hold and 1 recommends a Sell. With a return potential of 4%, the stock’s consensus target price stands at $32.67.