Goldman Sachs Tries To Catch the Falling Knife; Cisco (CSCO) Upgraded to Buy

Goldman Sachs upgraded Cisco (NASDAQ: CSCO) to Buy with a price target of $21.00, suggesting 34% upside, saying it is still a strong franchise.

They said after four consecutive guide-downs and 43% under-performance versus the S&P, Street estimates are now at the beginning of a multi-quarter upward estimate revision cycle.

Goldman cited three items: 1) The Street is under-modeling Cisco's cost-cutting actions, which can drive 5-10% upside to FY12 EPS estimates; 2) Cisco's sales growth will bottom in the current F4Q; 3) We think gross margins will bottom in early CY12.

For more ratings news on Cisco click here and for the rating history of Cisco click here.

Shares of Cisco closed at $15.69 yesterday.

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