In a report released today, Meta Marshall from Morgan Stanley maintained a Buy rating on Cisco Systems (CSCO – Research Report), with a price target of $65.00.
Meta Marshall has given his Buy rating due to a combination of factors that suggest a positive outlook for Cisco Systems. One of the key reasons is the expectation of a slight revenue beat and a more significant margin beat in the upcoming fiscal quarter, driven by positive enterprise data and minimal tariff impact due to exemptions and compliance with the USMCA. This setup is favorable as it aligns with the reasonable valuation of Cisco’s stock, which is currently trading at a discount compared to the S&P 500.
Furthermore, despite the dynamic market conditions, Cisco’s strong enterprise data points and potential deal pull-forwards ahead of price increases contribute to the positive sentiment. The downside risk is seen as limited, particularly in the US Federal sector, where Cisco’s business is largely mission-critical. Additionally, there is potential for gross margin improvement due to lower tariff impacts, and management’s ability to guide in-line with expectations further supports the Buy rating. Overall, these factors combine to create a favorable investment scenario for Cisco Systems.
In another report released on May 7, Citi also maintained a Buy rating on the stock with a $68.00 price target.