EU and US could reach trade deal this weekend - Reuters
On Friday, JPMorgan analysts reaffirmed their Overweight rating on Cisco stock, maintaining a price target of $73.00. The decision follows a detailed analysis of Cisco’s revenue prospects tied to the Campus upgrade and refresh cycle, bolstered by the launch of the next-generation Catalyst switch series, Catalyst-2026. Currently trading at $64.62 and approaching its 52-week high of $66.50, Cisco maintains its position as a prominent player in the Communications Equipment industry with a substantial market capitalization of $255.9 billion.
The anticipated introduction of the Catalyst-2026 switches is expected to drive revenue growth for Cisco, building upon its current annual revenue of $55.62 billion. Analysts highlight that the new product is likely to result in an average selling price uplift and a quicker adoption rate compared to the previous Catalyst 9K series. This development could lead to a projected 3% growth in port shipments, aligning with Cisco’s historical trends. According to InvestingPro, Cisco demonstrates strong operational efficiency with a gross profit margin of 65.24%, while maintaining a moderate level of debt. [Get access to 8 more exclusive InvestingPro Tips and comprehensive financial analysis with an InvestingPro subscription.]
JPMorgan forecasts a medium-term compound annual growth rate (CAGR) of 6% in Campus revenue for Cisco, compared to the 3% observed in recent years. This acceleration is predicted to contribute to a net increase of 100 basis points in Cisco’s overall top-line growth.
The analysis suggests that the Catalyst-2026 upgrade cycle could mark a notable shift in Cisco’s revenue trajectory, moving from low-single digit growth to potential mid-single digit growth in the medium term. Despite this opportunity, Cisco shares are currently valued for low-single digit growth, according to the analysts.
The reaffirmed rating and price target reflect optimism about Cisco’s capacity to leverage the Catalyst-2026 series to enhance its revenue streams and market position.
In other recent news, Cisco Systems Inc (NASDAQ:CSCO). reported financial results that exceeded Wall Street expectations, with the company achieving $14.15 billion in revenue and $0.96 in earnings per share (EPS) for the April quarter. This performance led Evercore ISI to raise its price target for Cisco to $72, maintaining an Outperform rating. Citi also increased its price target from $68 to $71, citing robust demand in networking and a surge in AI orders as significant contributors to Cisco’s success. However, New Street Research downgraded Cisco from Buy to Neutral, adjusting the price target to $70, due to concerns over stalled gross margin expansion and a deceleration in revenue growth.
UBS maintained a Neutral rating with a $70 price target, noting Cisco’s modest outperformance in the third fiscal quarter and significant AI order achievements. Cisco’s recent developments include the launch of Duo Identity and Access Management (IAM), a security solution aimed at combating identity-based attacks, which has received praise from industry experts. The company also highlighted its collaborations in Saudi Arabia and the UAE, emphasizing the potential for growth in the sovereign AI sector. These developments reflect Cisco’s strategic focus on AI and security, positioning it for continued growth in these areas.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.