Cisco Systems (CSCO) shares are rising after the networking-products-and-services giant was initiated outperform with a $60 price target at Evercore.
The price target represents a potential 22% upside from the stock's previous closing price of $49.21. Cisco shares are up 0.75% to $49.58 in morning trading Wednesday.
In a note that initiated coverage on six such companies, analyst Amit Daryanani wrote that investors are "underappreciating [Cisco's] shift towards a more predictable and free-cash-flow-focused model. [The] transition CSCO is undergoing merits investors focusing more on a FCF-based valuation vs. traditional price-to-earnings approach."
The firm's thesis for the industry is that investment will be concentrated in technologies that allow companies to support growing bandwidth demands with an incremental approach to 5G products.
Cisco is a key holding in Jim Cramer's Action Alerts PLUS charitable trust.