Cisco slips on Barclays downgrade


Citing "uneven demand trends, secular headwinds, and a lack of major catalysts," Barclays' Ben Reitzes has cut Cisco (CSCO -0.7%) to Equalweight, and lowered his PT by $2 to $23.

While believing Cisco's dividend (3.6% yield) will keep shares in the low-$20 range, Reitzes says he's unlikely to upgrade "until it becomes clear that the company can successfully execute on its major product transitions and fully participate in Cloud and software defined networking (SDN)."

Web/cloud services firms such as Google, Facebook, and Amazon pose an indirect threat to Cisco by eschewing its hardware in favor of cheap white-label gear that's often managed via SDN controllers. John Chambers predicted last year "IT as a service and white label will be [Cisco's] biggest competitors" in 3-5 years.

JPMorgan cited SDN (expected to see major enterprise adoption starting in 2015) as a reason for downgrading Cisco in January, and many others have also expressed their concerns. Cisco is hoping to keep customers loyal with the help of its ONE SDN platform, APIC controller, and Insieme hardware, as well as revamped enterprise pricing.

From other sites
Comments (0)
Be the first to comment
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs