- After postmarket declines following yesterday's earnings, Cisco Systems (NASDAQ:CSCO) is 7.5% lower this morning on the weak guidance provided.
- Federal spending is a drag on expectations, of up to 1%, says JPMorgan's Rod Hall -- though he expects that could pick up as more empty slots are filled in the Trump administration.
- He's Neutral on the stock, while Citi's Jim Suva sees a buying opportunity. He says the guidance is bad for electronics manufacturers with exposure to Cisco, notably Celestica (CLS -2.5%), Jabil Circuit (JBL -3.4%), Sanmina (SANM -0.7%) and Flex (FLEX -0.9%).
- RBC Capital's Mitch Steves is sticking with Outperform as well (though at a price target trimmed to $36 from $37). The stock will be in the "penalty box" until more details on long-term revenue growth come out at the company's analyst day in June, he says.
- Networking peers are also lower this morning: ANET -0.7%; UBNT -0.5%.