ARGUS Upgrades Cisco Systems (CSCO) to Buy

March 2, 2009 8:30 AM EST
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Price: $52.83 -0.62%

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ARGUS upgrades Cisco Systems (Nasdaq: CSCO) from Hold to Buy with a $24 price target, citing valuation and its position for competitive outperformance.

ARGUS analyst says, "We recognize the risk of continued sequential revenue declines and concomitant margin pressure for the network giant. Nonetheless, we believe that Cisco is well positioned for competitive outperformance in its fast-evolving markets. In the enterprise space, we believe that Cisco's strong embedded base of business will allow the company to sustain and build its market-leading share, while generating annuity service revenues. In addition, the carrier market is undergoing radical transformation, as carriers (SprintNextel (NYSE: S)) and vendors (Nortel (NYSE: NT) and Motorola (NYSE: MOT)) struggle for financial viability. We believe these dynamic conditions create opportunities for cash-rich Cisco to gain further market share, sustain its business development and advanced R&D pipelines, and create a more compelling valuation. Cisco's ongoing transformation into a web 2.0 company should extend its leadership as the network becomes more flexible, far-reaching and - for both carriers and vendors - lucrative."

Cisco Systems, Inc. designs, manufactures and sells Internet protocol (IP)-based networking and other products related to the communications and information technology (IT) industry, and provides services associated with these products and their use.

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