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Cisco Systems Inc (Nasdaq: CSCO) has gained more than 10% since early May but a JPMorgan analyst is convinced that it’s still trading at a discount.

Cisco stock could climb another 20%

On Wednesday, Samik Chatterjee upgraded the multinational to “overweight” and raised his price target to $62 that signals a 20% upside from here.

The analyst recommends buying Cisco stock as enterprise spending is now fairly restricted in terms of downside. His research note reads:

We expect demand/orders for networking equipment including wi-fi, campus switching, and datacenter switching to have limited further deterioration.

Chatterjee is confident that it’s elevated backlog will help power through any remaining weakness in enterprise spend. He turned bullish on the Qualcomm stock as well on Wednesday.

Joe Terranova is also bullish on Cisco stock

Cisco Systems Inc will report its Q4 results next month. Consensus is for it to earn 95 cents a share this quarter versus 74 cents per share a year ago.

The JPMorgan analyst likes Cisco stock also because he sees margins improving in fiscal 2024. Agreeing to his view on CNBC’s “Halftime Report”, Joe Terranova of Virtus Investment Partners said today:

In value tech, Cisco has the highest probability of building momentum and moving forward. Fundamentally, orders increased in the prior quarter.

Cisco Systems currently pays a dividend yield of 2.99% that makes up for an additional reasons to invest in it. Last month, the legacy tech company launched AI networking chips to better compete with rival, including Broadcom and Marvell.

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