Cisco Systems (NASDAQ:CSCO) received a flurry of bullish research coverage this morning: Merrill Lynch raised it price target, while RBC Capital and Pacific Crest both raised estimates as well as price targets. A quick summary:
- Tal Liani, Merrill Lynch: We are raising our [price objective] from $24.50 to $27 based on an increased confidence in Cisco’s growth prospects which we believe will be driven by (1) continued demand for Cisco’s routers and the ability to take share; (2) further international expansion, particularly in emerging markets; and (3) increased push int he area of unified communication. Liani says he thinks Cisco is on track to meet or beat his estimate for the Oct. 1 fiscal first quarter of $7.875billion in sales, and 29 cents a share in profits ex-options.
- Mark Sue, RBC Capital: We are increasing our forward estimates on Cisco based on accelerating router growth and strengthening trends in the emerging markets segment…Major service providers are reporting accelerating data traffic growth driven by video applications…Clean financials, no options issues, no board infighting, and consistent execution are some of the other investment positives for Cisco…Near-term, Cisco’s ability to replenish backlog has given us comfort in our estimates for the upcoming quarters. For the October quarter he sees $7.9 billion and 29 cents a share. He increased his calendar 2007 estimate to $1.28 from $1.22. Sue rates the stock Outperform, with a new price target of $28.
- Tim Daubenspeck, Pacific Crest: Based on discussions with our company contacts, we believe Cisco has changed its quota system for its [fiscal] 2007 sales compensation plan to increase its focus on selling products in the Advanced Technologies segment…[the new system] requires a certain percentage of their quotas to come from Advanted Technologies. This should increase the productivity of the sales force…We believe that this change indicates that Cisco must have been leaving some money on the table in the AT segment - specifically in security, storage, wireless LAN and enterprise telephony.” He raised his estimates to $1.31 a share from $1.28 for fiscal 2007, and to $1.52 from $1.45 for fiscal 2008. He increased his price target to $28 from $25.
Cisco shares are up 18 cents at $24.71.