Here's What Wall Street Experts Say About Cisco Ahead Of Earnings

Cisco (CSCO) is scheduled to report results of its fiscal fourth quarter after the market closes on August 17 with a conference call scheduled for 4:30 pm ET. What to watch for:

GUIDANCE: Along with its last report, Cisco guided for Q4 adjusted earnings per share of 76c-84c on revenue decline of 1%-5.5%. At the time, analysts were expecting Cisco to report Q4 EPS of 92c on revenue of $13.87B, but those figures have since dropped to 82c and $12.73B, respectively. In addition, Cisco also in its last report lowered its adjusted EPS and revenue growth guidance for fiscal 2022.

CITI: Earlier this week, Citi analyst Jim Suva said that the firm was the only with with Sell rating on Cisco ahead of the company's quarterly report, noting his fiscal Q4 sales estimate of $12.7B reflects a 3.3% year-over-year decline and compares to the Street consensus of $12.73B. Suva believes competitors have been able to procure more parts than Cisco, which is hurting Cisco's sales and market share, and sees both Arista Networks (ANET) and Juniper (JNPR) gaining share from Cisco in the coming quarters. In turn, Suva argued that inventory issues and share losses will lead the stock to trade lower due to valuation multiple compression.

JPMORGAN: Last month, JPMorgan analyst Samik Chatterjee downgraded Cisco Systems to Neutral from Overweight with a $51 price target. The analyst took a "defensive stance" with his networking and hardware coverage universe as he sees increasing signs of the challenging macro feed into demand trends. Chatterjee recommended that investors look for diversification away from higher risk areas like enterprise spending as well as auto exposure relative to "more resilient Capex spend" from cloud customers as well as telco/cable customers. He increasingly expects smartphones and TVs to cycle past trough sentiment with a rebound likely in the out-year driven by replacement cycles.

ROSENBLATT: Also in July, Rosenblatt analyst Mike Genovese initiated coverage of Cisco with a Neutral rating and $48 price target. The stock does not warrant a premium valuation because, despite the company's stated goal of increasing software and recurring revenues, Cisco "has not been very successful in attaining its business transformation targets," Genovese said at the time. The analyst believes Cisco likely can't make a big cultural change without a "very large" software acquisition.

RUSSIA: Cisco and Nike (NKE) told Reuters in late June that they plan to fully exit Russia. Cisco said at the time it would wind down its business in Russia and Belarus. Foreign companies seeking to exit Russia over the war in Ukraine face the prospect of a new law being passed in the coming weeks allowing Moscow to seize assets and impose criminal penalties, Reuters noted.


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