Cisco hit with three downgrades; analysts eye company-specific issues

|About: Cisco Systems, Inc. (CSCO)|By:, SA News Editor

Deutsche and Wedbush have respectively cut Cisco (CSCO) to Hold and Neutral, and Goldman has pulled the networking giant from its Conviction Buy list.

Deutsche: "While our checks noted emerging markets weakness, we were clearly wrong on magnitude of the order weakness." The firm thinks Asian/emerging markets weakness, also seen in reports from IBM, Alcatel-Lucent, and others, could take "several quarters to improve."

Wedbush argues Cisco's issues aren't entirely macro-related. "We believe the challenges Cisco faces with [carrier] product transitions raise concerns about the company's ability to manage one of the more evolutionary changes in networking with the new [Insieme] SDN switching platform."

Goldman, a long-time Cisco bull, thinks only 1/3 of the company's revenue guidance shortfall was due to macro issues. It chalks up the rest to company-specific issues such as product transitions, low-end edge routing share losses to Alcatel and Juniper, and major set-top declines. The firm has lowered its estimates through FY16.

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