Cisco Systems Inc. (NASDAQ: CSCO) will release its fiscal fourth-quarter financial results after the markets close on Wednesday. The consensus estimates from Thomson Reuters are $0.61 in earnings per share (EPS) and $12.07 billion in revenue. In the same period of last year, Cisco posted EPS of $0.63 and $12.64 billion in revenue.

In a recent report, Jefferies issued a Buy rating with a $37 price target. The firm noted that it continues to believe the company understates the size of the revenue headwind associated with the move to subscription. Jefferies acknowledges that the headwinds from the move to subscription will act as an overhang on shares and execution remains key, but the firm believes Cisco’s expectations as it relates to federal spending may prove conservative.

After Cisco’s most recent earnings report, Credit Suisse made a long-term call on the stock:

In our M&A analysis, we see long term CSCO EPS power of $3.30-$3.50, > 40% above current levels, of which 22% is driven by buyback with the rest from M&A accretion. Our standalone base case allows for continued growth in areas such as Security and Services to offset Switching and Data Center share loss, and GM [gross margin] pressure (we explicitly assume a 1000bps long term contraction in switching GM), Even in such a scenario we see standalone EPS trending towards $2.50, suggesting upside. Our TP [target price] of $40 is a blended average of these scenarios as well as our long term DCF [distributable cash flow].

Other analysts weighed in on Cisco ahead of the earnings report:

• Drexel Hamilton has a Buy rating with a $39 price target.
• Credit Suisse has a Buy rating.
• Deutsche Bank has a Buy rating and a $40 price target.
• Robert Baird has a Buy rating with a $38 price target.
• BMO Capital Markets has a Hold rating.
• Sanford Bernstein has an Outperform rating and a $38 target.
• Cowen has an Outperform rating with a $39 price target.
• Instinet has a Neutral rating with a $29 price target.
• William Blair has an Outperform rating.

So far in 2017, Cisco has underperformed the U.S. broad markets, with the stock up 6% year to date. Over the past 52 weeks, the stock is only up about 3%.

Shares of Cisco were last seen at $32.32, with a consensus analyst price target of $35.94 and a 52-week range of $29.12 to $34.60.

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