Citi Upgrades Cisco (CSCO) to Buy

Citi analyst Atif Malik upgraded Cisco (NASDAQ: CSCO) from Neutral to Buy with a price target of $62.00 (from $52.00).

The analyst comments: "We upgrade CSCO to Buy as we expect the company to benefit from an expanding Ethernet AI TAM and a narrowing valuation gap versus peers. While AI is currently a small piece of the biz (~2% of revs), we see the potential for a stronger contribution. With more AI coming, we are incrementally more constructive on the group and expect continued investor rotation out of semis/hardware into networking equipment to benefit group valuation. We raise FY25/26 EPS estimates by 2%/5% and lift our TP to $62. Our updated 16x P/E multiple reflects a meaningful discount to peer average of ~25x due to core market share loss concerns partially offset by a growing AI opportunity. With Jul-Q and FY24 the expected trough in sales, we see limited incremental downside and view Oct-Q results (11/13) as a potential catalyst."

For an analyst ratings summary and ratings history on Cisco click here. For more ratings news on Cisco click here.

Shares of Cisco closed at $54.08 yesterday.

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