Cisco Climbs as Wolfe Upgrades on Potential Return-to-Office Bump

Cisco was upgraded to outperform from peer perform at Wolfe Research, which sees a return-to-the-office bump for the telecom-equipment major.
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Shares of Cisco  (CSCO) - Get Report were rising Friday afternoon after a number of recent analyst upgrades of the telecom-equipment major, most recently from Wolfe Research.  

Cisco was a laggard last year as the COVID-19 forced many companies' employees to work from home. 

Now that enterprises are pressing employees to return to on-site work, the San Jose, Calif., networking company could see a bump. 

Cisco was upgraded to outperform from peer perform at Wolfe Research, with analysts saying that the company has durable growth prospects. "[Strong] IT spending should prove a tailwind to Cisco estimates" through 2022, the firm said. 

Wolfe raised its price target to $63 a share from $48. 

Shares of Cisco at last check were 2.5% higher at $52.93. The new target indicates 22% upside from Thursday's closing price at $51.64.

As employees return to offices, "we could see a shift in IT spending toward enterprise projects that were left behind in COVID," said Ted Mortonson of Baird in a recent note. 

"Between enterprise spending, better valuations, and a possible lift from infrastructure, you're seeing names like Cisco and IBM  (IBM) - Get Report go up and to the right."

Goldman Sachs also published a bullish note recently, saying a return to offices would lead to better IT spending in general, with Cisco seeing a tailwind from a replacement cycle for older technology. 

JPMorgan also upgraded the stock in early March, citing a recovery in enterprise spending. 

Cisco next month is scheduled to report fiscal-third-quarter results. Wall Street is expecting adjusted earnings of 82 cents a share as revenue grew about 5% to $12.59 billion. 

That growth would represent the fastest pace since 2018, according to Bloomberg.