Cisco Systems (CSCO) Stock Drops as Goldman Sachs Downgrades to Neutral on Valuation, Prefers Dell (DELL)

Shares of Cisco Systems (NASDAQ: CSCO) are down 2.5% in pre-open Wednesday after Goldman Sachs analyst Rod Hall downgraded shares to Neutral from Buy with a $65.00 per share price target.

Hall notes that CSCO stock is now trading close to GS’ price target while his fundamental outlook is now in line with consensus, hence he sees little upside from current levels.

“Our EAI, which has historically been predictive of Cisco's order trajectory, also continues to decline with our December reading now in negative territory after having peaked in the middle of 2021. While we continue to see Cisco's ongoing Cat 9K refresh and increased campus networking demand as tailwinds, we believe this is now more balanced by broader demand headwinds that we expect to materialize,” Hall said in a client note.

The analyst upgraded CSCO stock to Buy in March last year, with shares gaining around 20% vs SPX return of 18% over the same period.

Hall prefers Dell Technologies (NYSE: DELL) as a preferred play in the value technology sector.

By Senad Karaahmetovic | [email protected]

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