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Cisco analytics sink, but it's not Cisco, analysts say

Cisco Systems Inc. Shares they fell on Thursday after analysts cut their price targets in response to the disappointing prospect of the network giant, but most said the problems seemed to be slowing down in a larger technology spending environment.


CSCO, -7.42%

shares touched the lowest of $ 44.60 on Thursday morning, or 8% lower than Wednesday's close. This is the biggest one-day slump since August when Cisco first talked about a potential slowdown in technology spending.

Cisco issued a disappointing outlook on Wednesday after the California-based San Jose-based company said that delaying big deals had become more widespread. Cisco Chief Executive Chuck Robbins said in a statement on Wednesday that weaknesses in the business of service providers and emerging markets also extended to the company's larger businesses, including businesses and businesses.

Barclays analyst Tim Long, who has been given an equal weight rating and reduced his price objective to $ 47 from $ 51

, said he was "concerned over the last quarter with comments about the shrinking Enterprise order in July."

"This weakness continued through the October quarter and spread to the normal trading market," Long said, maintaining the equivalence of the hold rating. "We believe this poses a great risk."

See also: Cisco Confirms Concerns of Wide-Based Technology Cost Slowdown

Evercore ISI analyst Amit Daryanani, with better results and a $ 55 price tag, took some comfort that Cisco's problems appear to be driven from a delay that goes beyond Cisco.

"Generally with we believe that most of these Cisco biases are macro related, given the muted enterprise costs and the softness of trade orders (usually elastic) in addition to increasing macro insecurity across countries and more difficult comparisons across years (despite that comparisons become easier in FH2: 20), "said Darianani." Net / net: We think Cisco is more of a macro story at this stage, and as global uncertainties decrease, stocks should start working higher . "

Analyzer Wells Fargo's Aaron Rakers, which scores better and lowered its price target to $ 58 from $ 60, said that while "we expect heightened concerns about the widening of macroeconomic uncertainty, we remain positive about competitively positioning Cisco, the current product cycle of the Cat 9k campus (increasingly driven by the adoption of WiFi6) and the continued increase in the software subscription mix. "19659002] Jeffries analyst George Notre, who has a buy rating and reduced his price target to $ 52 from 54 dollars, said Cisco executives had a few tricks to isolate stocks from the delay.

"We expect them to conserve EPS energy as margins widen and reduce costs. Lower market valuations and dividend yields should also help to keep stock down, "Notre said. "In addition, the trend of transformation / digitalization of the business that drives the business is unchanged – even in a softer economic environment."

For more: The big concerns investors face in 2020 equity According to Citi's Leading Stock Strategist

Cisco's stock rose 3.1% this Thursday, with the S&P 500 index down

SPX, + 0.03%

earned 23% and the Dow Jones Industrial Average

DJIA, -0.05%

– which accounts for Cisco as a component – has increased by 19%.

Of the 28 analysts covering Cisco, 16 are overweight or buy a stock rating, and 12 have a hold rating. However, after the earnings report, 15 analysts lowered their price objective, bringing in an average of $ 52.46, below the previous average of $ 54.91, according to FactSet.

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