Checks Suggest Cisco (CSCO) Order Acceleration Stalled in October

November 6, 2012 11:31 AM EST
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Price: $29.98 -0.17%

Rating Summary:
    32 Buy, 25 Hold, 2 Sell

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    Up: 23 | Down: 34 | New: 34
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MKM Partners maintained a Buy on Cisco (NASDAQ: CSCO) and cut its price target to $23.00 (from $24.00) after field check suggested order acceleration stalled in late September and October.

"Our U.S. Value Added Reseller (VAR) contacts became temporarily more optimistic toward late September that orders would improve into October," said analyst Michael Genovese.

He upgraded the stock to Buy on October 2 based on the thesis. However, following MKM's most recent round of VAR checks, analyst said they believe October was a disappointing month for orders at Cisco, as roughly 60% our contacts reported coming in below plan.

"Based on this due diligence, we think Cisco’s product orders likely stabilized at roughly 2% y/y growth in the October quarter, but have not yet shown measurable improvement," said Genovese.

"While the timeline for acceleration has been pushed out, we continue to expect Cisco's product order rate to improve along with macroeconomic conditions in 2HFY13/1HCY13," he added.

For an analyst ratings summary and ratings history on Cisco click here. For more ratings news on Cisco click here.

Shares of Cisco closed at $17.40 yesterday.

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