NEW YORK (TheStreet) - Cisco (CSCO) shares fell 0.19% to $25.92 following a downgrade from Pacific Crest Securities, as a result of the stock risk in the coming battle for cloud computing could lessen Cisco's multiple and margin expansion.
The San Jose-based Cisco is at a crossroads in the cloud business that leaves analysts uncertain about the stock's performance in the short run. Pacific Crest analysts Brent Bracelin expect that "enterprise adoption of cloud and new software technologies is reaching a tipping point," and as a result, there will be an increase in the amount of consolidation for the communications and networking industry. The mega-cap communications and networking giant has a strong position for the coming M&A activity because of the large pile of cash they keep on hand, which Pacific Crest now says exceeds Cisco's revenues.
Pacific Crest downgraded shares to "sector perform" from "outperform."
-- Written by Whalen MacHale in New York. Follow @WMacHale
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