Cisco Systems, Inc. (CSCO): A Quick Look Before The Call

With Cisco Systems, Inc. (NASDAQ:CSCO) preparing to release fiscal second-quarter results today after market close, BMO Capital analyst Tim Long is out with a few final thoughts.

Long wrote, “Expectations are fairly muted heading into earnings and given last quarter’s reset to expectations, we expect management to maintain a conservative outlook. While enterprise spending trends look to be improving, telco spending remains soft and Cisco’s transition to recurring revenue businesses is having a deflationary impact on near-term revenues. That said, we expect Cisco to modestly top current quarter expectations, which are quite low.”

“For F2Q17, we model revenue and EPS of $11.6B/$0.56, both in line with consensus. We forecast GM of 63.8% and op margins of 29.8%. For F3Q17, we forecast revenue and EPS of $11.8B/$0.55 versus consensus of $11.8B/$0.58,” the analyst added.

The analyst reiterates an Outperform rating on shares of Cisco Systems, with a price target of $33, which represents a slight upside potential from current levels.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Tim Long has a yearly average return of 9.3% and a 62% success rate. Long has a 16.5% average return when recommending CSCO, and is ranked #451 out of 4453 analysts.

Out of the 31 analysts polled in the past 12 months, 19 rate Cisco stock a Buy, 11 rate the stock a Hold, while only one recommends to Sell. With a return potential of 2%, the stock’s consensus target price stands at $33.35.


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