Barclays Capital analyst Ben Reitzes (Equal Weight, $25 PT)
"If it weren't for carrier trends and weakening emerging markets, Cisco would have much stronger momentum. However, the tone seemed a bit less upbeat than it was in May given a deceleration in emerging markets like Brazil, Russia and China - and further lumpiness in carrier spending. Cisco also announced another significant workforce rebalancing as it tries to ignite growth via more focused investment but the program will not result in any net savings. While bookings trends suggest solid demand in developed markets, the outlook seems a bit mixed. We remain EW and adjust our price target slightly to $26 from $25 as we roll over to FY16 estimates."
UBS analyst Amitabh Passi (Buy, $29 PT)
"Overall, our ests change modestly (FY15/16E EPS at $2.14/$2.27). Cisco also announced a reorg affecting 6k employees as it pivots towards DC, cloud, security, and software, and we still believe this could drive headcount lower LT. Cash Flow from ops was strong at $3.6b, above UBSe of $3.2b, with $8.6b still left in the share buyback plan."Cantor Fitzgerald analyst Brian White (Buy, $31 PT) "Last night, Cisco Systems ended FY:14 on a strong note, with healthy upside in 4Q:FY14, and offered up an in-line 1Q:FY15 outlook that is slightly held back by a higher tax rate. As part of Cisco's more proactive stance on reallocating resources to the faster-growing areas of the IT market, the company announced a new alignment initiative. Netting this out, we are slightly increasing our FY:15 revenue forecast but fine tuning our EPS estimate for a higher tax rate, while maintaining our 12-month price target at $31.00." Deutsche Bank analyst Brian Modoff (Buy, $30 PT) "Q4: $12.35B / $0.55 - solid beat on revs, EPS vs DB and consensus. The Q1 outlook: $12.15B / $0.52, mid-point) was higher on revs; penny light on EPS (higher tax rate) vs consensus. While Q4 saw order strength in Enterprise (+9% Y/Y); weak Service Provider orders (-11% Y/Y) + slightly light gross margin outlook could be basis for slight weakness in the stock AM. We maintain our positive outlook and Buy rating – noting a “glass half-empty scenario” heading into CY15 (reasonable valuation; improving GDP; new product ramps in switching, security, wireless) – basis for modest upside surprises to consensus view. Our $30 PT unchanged on our updated forward estimates." Pacific Crest Securities analyst Brent Bracelin (Sector Perform, No PT) "We are encouraged by healthy signs of an enterprise recovery but see few reasons to justify P/E multiple expansion for CSCO above 11x to 12x unless EPS growth reaccelerates. F2015 will likely be an investment year even with the 8% layoffs as Cisco reinvests for cloud. We maintain our Sector Perform rating until we see a path to higher EPS growth and operating leverage." --Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia
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