was edging higher and supporting the Nasdaq early Thursday after
raised the stock to outperform from in-line, saying fair value is about $3 north of its current level.
Cisco was recently up 35 cents, or 1.4%, to $20.59. The stock added 65 cents, or about 2%, to $20.24 on Wednesday after CEO John Chambers said August results were tracking ahead of plan. It's up better than 40% since March.
"We expect Street estimates will move higher over the coming quarters as near-term traction continues ahead of plan and positive long-term technology trends broaden to a wider customer base," Goldman wrote. The brokerage said it expects Cisco to earn 84 cents in the 2005 calendar year; the Thomson First Call consensus is currently 73 cents.
Goldman said Cisco's fair value is $23 to $24.
In addition to the Chambers comments, Goldman cited evidence that seasonally strong government spending is materializing, and channel checks that suggest its small and medium-sized business demand remains healthy.
"Longer-term, the combination of broad enterprise hardware and software trends plus improving economic indicators support our view that the recent renewed demand for networking equipment will broaden over the next 12 to 18 months," Goldman said.