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TheStreet Open House

Cisco's Slump Not as Bad as Wall Street Thinks

CSCO Chart CSCO data by YCharts

Wall Street is showing extreme amounts of concerns about the job cuts, and though CFO Frank Calderoni in an interview with TheStreet wouldn't clarify further on the cuts, Oppenheimer analyst Ittai Kidron , who rates shares "outperform" with a $27 price target believes it should be taken as a positive. "Investors could look at the planned 4,000 headcount reduction as a sign of greater issues, yet we would take the view that Cisco is merely accelerating planned reorg. activities to better align resources for future growth," Kidron wrote in his note. "We view this as a bump in the road and remain bullish on Cisco."

Prior to the report, shares were up sharply year-to-date, and there was a lot of enthusiasm going into the print, especially in light of Brocade's (BRCD) earning results.

Lazard analyst Ryan Hutchinson who has a "neutral" rating on shares believes that demand is improving, and the second half should be better. "We believe Cisco's results may damper sentiment across the group; however, we believe that demand trends are modestly improving and remain optimistic with respect to a 2H recovery in IT spend."

-- Written by Chris Ciaccia in New York

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