Evercore ISI adds Cisco (CSCO) to Tactical Outperform List, 'Its Time to Disco'

Evercore ISI analyst Amit Daryanani reiterated an Outperform rating and $56.00 price target on Cisco (NASDAQ: CSCO).

The analyst comments "We think CSCO is positioned to report Oct-qtr results that are inline to likely modestly ahead of street expectations and provide a Jan-qtr and FY23 guide that should bracket current street expectations. While order trajectory is likely to continue declining given tough compares and normalization of order duration – we suspect this will occur simultaneously to improved backlog conversion (revenue upside). Our checks through the quarter have suggested that CSCO is seeing better demand tailwinds as supply continues to improve across their core campus and data center solutions at the same time we think CSCO has been more aggressive in picking up share in the security and optical space (though this part could dilute GMs somewhat). In aggregate, our positive bias on CSCO though the EPS call & beyond is driven by – a) Attractive FY23 set-up as compares go from +8% in Q1 to -0.5% in Q4, b) share gain tailwinds in Silicon, Optical & Security, c) potential to benefit the most from supply availability and d) buybacks/cap allocation remains under appreciated. Net/net: We think a beat and maintain should be plenty for the stock to work higher in the current environment given the underperformance YTD. Furthermore, CY23 should set-up well for CSCO as the company could see accelerating sales growth, improved margins and buybacks. Sticking with OP and $56 target."

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 $44.61 yesterday.

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