Cisco Systems (CSCO): Cutting Estimates - RBC

RBC Capital analyst, Mitch Steves, is cutting estimates on Cisco (NASDAQ: CSCO) for the following reasons:
1) F/X headwinds based on depreciation of GBP and Euro
2) likely softness through CY16 given Brexit, resulting in large IT budget items being placed on hold or pushed out
3) expectations of softer IT spending post Brexit (1.2% vs. prior forecast of 1.5%).

Further implications may involve vendors raising prices to offset the negative currency shifts, which could ultimately impact the overall demand environment (Dell recently raised prices due to F/X according to the ChannelRegister).

Jul-qtr estimates drop to $12.37B/$0.58 and Oct-qtr estimates fall to $12.25B/$0.61 to reflect the above concerns. In short, the analyst's estimates move to the low end of Cisco's original guidance to reflect F/X and IT spending.

No change to Outperform rating or price target of $33.00

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 $28.72 yesterday.

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