391781 03: The Deutsche Bank headquarters sign is on display July 11, 2001 in New York City. (Photo by Mario Tama/Getty Images)
Ahead of earnings, analysts from Deutsche Bank weigh in on SolarCity Corp (NASDAQ:SCTY) and Cisco Systems, Inc. (NASDAQ:CSCO). Both analysts remain bullish on the companies, calling recent share weakness a great entry point. Let’s take a closer look:
Vishal Shah of Deutsche Bank weighed in on Solar City yesterday, reiterating a Buy rating with a $64 price target. The company will post earnings today after market close. The analyst expects the company to “reiterate end 2016 cost and cash flow break even targets.”
The analyst notes that the company is trading below pre-Investment Tax Credit levels, even though California and Nevada had positive outcomes for its metering proposals. He continues, “We believe concerns around availability of capital to achieve 2016 installation targets maybe overblown as the company can access a number of other options besides the ABS markets where the costs maybe high but capital is still available.”
The five year extension on ITC, or Investment Tax Credits, was great news for the company. Shah estimates this extension can add $10 per share of “incremental equity value to SCTY.” He continues, “We believe oil price weakness has no impact on retail electricity rates and SCTY should be in a position to raise prices in 2016. We also expect the CA net metering decision to be a positive for overall resi solar market and checks indicate that even tier 2 leasing companies are increasing procurement of modules in Q1/Q2 timeframe.”
Out of the 9 analysts polled by TipRanks over the last 3 months, 7 are bullish on the solar panel company, 1 is neutral, and 1 is bearish. The average 12-month price target between these 9 analysts is $65.29, marking a 133% potential upside from where shares last closed.
Cisco Systems, Inc.
Analyst Vijay Bhagavath of Deutsche Bank weighed in yesterday on Cisco prior to its Q2 2016 earnings, which are set to release on tomorrow, February 10, after market close. The analyst predicts “in-line Q2 print on the topline, penny EPS beat, and a light Q3 guide versus the current consensus view.”
He explains that the current stock price represents a compelling entry point for investors as the company is experiencing a “meaningful business model transition” to a “software and recurring revenue model.” Bhagavath comments that while some segments such as Campus LAN Switches experienced “weak order outlook,” other segments such as Next Generation Core Routing experienced a “modest uptick.” The analyst is also bullish on datacenter switching and upgrading, as well as the company’s security and collaboration business growth.
According to TipRanks’ statistics, out of the 19 analysts who have rated the company in the past 3 months, 14 gave a Buy, 1 gave a Sell, while 4 remain on the sidelines. The average 12-month price target for the stock is $30.56, marking a 33% upside from where shares last closed.