Investing.com -- HSBC downgraded Cisco Systems (NASDAQ: CSCO) to Hold from Buy and cut its price target for the stock to $120 from $137 in a note on Friday, saying that while fourth-quarter results were strong, the stock lacks a near-term catalyst.

"Solid results but missing catalyst," analyst Abhishek Shukla wrote, adding that the downgrade reflects "valuation and lack of positive catalysts."

Fourth-quarter non-GAAP operating profit came in 6% above consensus, HSBC said, with non-GAAP earnings per share of $1.22, up 23.2% year over year and 4% to 5% above estimates.

Cisco guided to fiscal 2027 revenue of $72.8 billion, a 15% increase and above the pre-results consensus of $68.8 billion, while its EPS outlook of $5.08 also topped expectations. The bank raised its fiscal 2027-28 EPS estimates by 2% to 6%.

HSBC expects networking revenue to rise 24.2% in fiscal 2027, driven by 97% growth in the hyperscaler AI subsegment, before moderating to 12% in 2028 and 8% in 2029. Cisco booked $9.3 billion of hyperscaler orders in fiscal 2026, including $4 billion in the fourth quarter, with management expecting orders to be "meaningfully higher" this year.

Still, the bank sees EPS growth peaking at 32% in the first quarter before easing to around 8% from fiscal 2028. Cisco trades at 20.9 times HSBC’s calendar 2027 estimates against a sector median of 21.4 times, a discount the bank considers warranted given slower long-term growth than peers.