Citi resumes Cisco at Neutral, opens ‘positive catalyst watch’

Citi resumed coverage of Cisco with a Neutral rating and $52 price target. The analyst also opened a “90-day positive catalyst watch” on the shares. While estimates likely come down for the next two quarters on a prolonged inventory correction and impact from Splunk, the stock’s multiple should expand modestly as the company benefits from Stage 2 artificial intelligence-related networking demand from sovereign nations and cloud providers, the analyst tells investors in a research note. Citi expects Cisco to benefit from the early close of the Splunk acquisition and a growing AI backlog.