Cisco (NASDAQ:CSCO) stock has underperformed the broader markets over the past year. This underperformance stems from macro headwinds that forced its leadership to lower its full-year revenue guidance twice in the current fiscal year. While CSCO stock has lagged behind the S&P 500 Index (SPX), a couple of Wall Street analysts find its valuation attractive near the current levels.
Cisco is a leading provider of a wide range of technology solutions, including networking hardware, software, and telecom equipment. Notably, the ongoing macro headwinds have adversely impacted enterprise spending, consequently affecting CSCO’s financial performance.
Analysts Find CSCO Stock’s Valuation Compelling
It’s worth noting that Morgan Stanley analyst Meta Marshall resumed coverage of Cisco stock on April 9 with a Buy rating. The analyst’s price target of $58 implies 15.98% upside potential from current levels.
Marshall believes that CSCO stock trades at a considerable discount relative to the S&P 500 and offers double-digit shareholder returns. While Marshall acknowledges that it may take one or two quarters for CSCO to see positive estimate revisions, the analyst still sees considerable value in the stock.
Echoing similar sentiments, Deutsche Bank analyst Matthew Niknam said that Cisco stock is trading at about a 35% discount to the S&P 500. Niknam sees CSCO stock as a short-term investment idea with an upside bias. The analyst termed Cisco’s valuation “depressed” and increased the price target to $52 from $51. However, the analyst reiterated a Hold on the stock on April 9.
Is CSCO a Buy, Sell, or Hold?
Macro uncertainty, weak demand from telecom and cable service providers, and a cautious full-year outlook keep analysts sidelined on CSCO stock.
Cisco stock has received three Buy and 12 Hold recommendations for a Hold consensus rating. Analysts’ average price target on CSCO stock is $53.09, implying 6.16% upside potential over the next 12 months.
