Cisco Eases 4% After Morgan Stanley Cuts Revenue Estimates

Christopher Stix has some lingering doubts about Cisco(CSCO Quote).

The Morgan Stanley Dean Witter analyst cut his near-term estimates on the networking giant this morning. The company will likely earn two cents a share for the fourth quarter, the analyst said, less than his previous estimate of four cents. The Thomson Financial/First Call estimate currently stands at two cents a share.

The shift in earnings expectations is a result of lowered revenue forecasts by Stix, who now sees an 8% sequential decline in revenue, towards the low end of Cisco's flat to down 10% revenue guidance. Stix predicted a range of anywhere from a 3% decline to a 14% decline in sequential revenues.

While Stix maintained his outperform rating on Cisco this morning, he cut his 12-month price target on shares of the company stock to $22 from $25. The analyst said he believes the decline in revenue is already priced into the stock, and that his reduction of share price target is based solely on a revamped income model.

Cisco shed 74 cents, or 4%, to $18 in morning trading.