Fundamental Analysis

CISCO – The Spine of the Web

CISCO, Day by day

Cisco Methods Inc. (Cisco) has lengthy been THE participant within the USA for world community gear gross sales like routers, switches and gateways. Lately it has additionally,  like many corporations, moved into software program purposes and safety.

The know-how large, also known as the spine of the web, reviews its quarterly earnings later as we speak after the shut of the New York buying and selling session. The shares have been in excessive demand following the December low at $40.35 closing yesterday at $47.89, slightly below the important thing 52-week excessive of $49.47. The rally from December 26 represents a achieve of some 18.68%, which outperforms the USA500’s achieve of 16% over the identical interval.

Final quarter CISCO revenues jumped  eight% to succeed in $13.1 billion, forward of all estimates. Extra particularly, the applying enterprise surged 18% and safety climbed 11%. It additionally noticed its adjusted earnings per share leap 23% to additionally beat estimates.

Right this moment Cisco are calling for its second quarter 2019 revenues to climb between 5% and seven% and its earnings per share (EPS) to return in on the $zero.71 to $zero.73 a share vary.  Market expectations have cooled lately, with a change in outlook from Morgan Stanley issued simply yesterday that modified their advice from “obese”  to “equal-weight”  and lowered their value goal to $49.00 from $51.00 a share.¹  Nomura too additionally downgraded the corporate to a “Impartial from a “Purchase” in December. Nonetheless, Pipar Jaffray reiterated their “Chubby” ranking in October with a value goal within the $50.00-$53.00 vary and stay essentially the most bullish of all analysts protecting Cisco²

Technically, the Fibonacci extension suggests the inventory may rise to the $53.00 stage ought to the 2018 $49.00 stage be breached and damaged.  Key help sits at S1 and the 61.eight Fibonacci stage at $46.75, the 20 day-moving common and S2 at $46.00 and at last the 200-day transferring common at $44.40.

¹https://www.marketwatch.com/story/cisco-stock-downgraded-at-morgan-stanley-2019-02-12?siteid=yhoof2&yptr=yahoo

²https://www.finviz.com/quote.ashx?t=CSCO

Stuart Cowell

Head Market Analyst

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