Goldman Sachs keeps a Neutral rating and $59 price target on Cisco (CSCO) after the company’s acquisition of Splunk (SPLK). The firm states that it is encouraged by Cisco’s efforts to strengthen its portfolio in next-gen AI observability and security and the expected cash flow accretion in the first year of the deal, with limited product overlap likely to dampen the risk of dissynergies, the analyst tells investors in a research note. Goldman Sachs adds however that while Splunk should benefit from Cisco’s global enterprise go-to-market capabilities, the firm is also cognizant of execution risk for Cisco as Splunk continues to transition to the cloud, along with its history of execution challenges.
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