Deutsche Bank cut Cisco ( CSCO) to hold from buy, saying its recent run-up might reflect too much optimism about a technology-spending recovery.

Cisco's shares have risen 22% this year, compared with the S&P 500's 5% gain, and at about $16 are trading at 25 times Deutsche's calendar-year earnings estimate of 65 cents a share. The brokerage's Cisco price target is $17.

"Although there are increasing signs of stability in enterprise demand for equipment, we are increasingly skeptical of a recovery this year," Deutsche wrote. "Our checks indicate a muted IT spending environment except for specific areas such as security and storage. While Linksys will add approximately 3% to the top line, it will be at very low margin."

Linksys is the home-office WiFi shop Cisco is in the process of acquiring.

Deutsche said Cisco has done almost all it can with its margins and is, for the most part, at the mercy of the economy now.

"We believe the runup in the stock price has accounted for the bulk of the investment potential pending sustainable top-line growth -- which we believe requires a recovery in the IT spending environment."

According to the Island ECN, Cisco recently traded for $15.78. It closed at $15.99 Tuesday.

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