UBS's Milunovich Raising Cisco Systems (CSCO) PT

September 12, 2016 8:01 AM EDT
Get Alerts CSCO Hot Sheet
Price: $30.10 +0.40%

Rating Summary:
    32 Buy, 25 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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UBS analyst, Steven Milunovich, reiterated his Buy rating on shares of Cisco (NASDAQ: CSCO) and increased the price target to $35 on the belief that the valuation discount to comps should narrow.

The analyst does expect revenue growth of 3% to be at the lower end of the current 3-6% guidance, this still exceeds the consensus expectation of 2%. The operating margin should increase with a mix shift to software. The stock’s P/E has gone from a premium to a discount relative to a basket of comps, which does not seem entirely warranted as Cisco has less cloud vulnerability than other legacy names. Finally, the EV/FCF multiple is well below comps.

The PT increases to $35 from $32 on a target P/E revision from 13x to 14x F17E EPS.

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 $30.85 yesterday.

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