Cisco Systems Inc. (NASDAQ: CSCO) is scheduled to report its earnings after the markets close on Wednesday. The consensus estimates call for $0.54 in earnings per share (EPS) on $11.76 billion in revenue. In the same period of the previous year, it posted EPS of $0.53 and revenue of $11.94 billion.
This top mega-cap technology stock pick on Wall Street is perhaps a surprising defensive pick for volatile markets like we have witnessed. Cisco posted disappointing earnings in November, and many on Wall Street lowered their price targets for the networking giant significantly. Yet, Cisco is also one of the 24/7 Wall St. top 10 stocks to own for the next decade.
Last year Cisco won an important contract for the Verizon build-out of the company’s next-generation 100G metro network. While Cisco’s optical business is small as a part of total revenue, this win is seen by Wall Street as a significant endorsement of the investments Cisco has made in its optics business.
Analysts across Wall Street point to an estimated double-digit bookings momentum for Cisco’s Meraki Cloud Services. Many think that Meraki likely will be a $1 billion plus run-rate business this year, with an incredible 50% to 70% compounded annual growth rate. A jump from 40 GE to 100 GE data center switching and next generation security also are adding to the total sales profile and product mix.
A few analysts weighed in on the company recently:
- Barclays has an Overweight rating but lowered its price target to $29 from $31.
- Jefferies reiterated a Neutral rating and a $26 price target.
- Credit Suisse reiterated an Underperform rating with a $22 price target.
- Robert Baird reiterated an Outperform rating and lowered its price target to $30 from $32.
So far in 2016, Cisco has underperformed the market, with the stock down 15% year to date. Over the past 52 weeks, the stock is only down 13%.
Shares of Cisco were trading at $22.63 on Tuesday, with a consensus analyst price target of $29.90 and a 52-week trading range of $22.47 to $30.31.
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