Cisco Systems Receives a Buy from Drexel Hamilton

By Austin Angelo

Drexel Hamilton analyst Brian White reiterated a Buy rating on Cisco Systems (NASDAQ: CSCO) today and set a price target of $40. The company’s shares closed yesterday at $34.23, close to its 52-week high of $34.60.

White wrote:

“We continue to believe Cisco’s stock will receive investor support given the company’s rich dividend yield, attractive valuation (11.4x CY:18, ex-cash), expanding recurring revenue contribution, consistent execution and prime position as a beneficiary of potential revisions in repatriation policies. Also, Cisco is heading into its seasonally strongest quarter of the year. We believe Cisco will at least meet our 3Q:FY17 revenue estimate of $11.84 billion (Street is at $11.90 billion) and our EPS projection of $0.58 (Street is at $0.58). Our revenue estimate reflects a 2% QoQ increase in sales and inline with the five-year average uptick. Cisco’s 3Q:FY17 outlook calls for sales to fall by 2% to flat YoY (i.e., $11.76 billion to $12.0 billion) with pro forma EPS of $0.57-0.59.”

According to TipRanks.com, White is a 5-star analyst with an average return of 11.4% and a 65.8% success rate. White covers the Technology sector, focusing on stocks such as Juniper Networks, Salesforce.com, and Amphenol Corp.

Currently, the analyst consensus on Cisco Systems is Strong Buy and the average price target is $37.73, representing a 10.2% upside.

In a report issued on May 1, Robert W. Baird also reiterated a Buy rating on the stock.

Based on Cisco Systems’ latest earnings report for the quarter ending January 31, the company posted quarterly revenue of $11.58 billion and quarterly net profit of $2.35 billion. In comparison, last year the company earned revenue of $12 billion and had a net profit of $2.35 billion.

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