NEW YORK (TheStreet) -- Shares of Cisco Systems (CSCO) are up 0.82% to $29.59 in early market trading Thursday, despite getting a downgrade by analysts at Sterne Agee CRT to "neutral" from "buy" this morning.
The firm issued a $31 price target, based on valuation. Sterne Agee analysts added that they see limited earnings leverage in the next few quarters.
However, Cisco reported its fiscal third quarter earnings ahead of expectations late Wednesday, and issued an upbeat fourth quarter outlook.
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio says, "This was the most 'take no prisoners' I have ever heard John," about the attitude of current chairman and CEO John Chambers on the earnings call.
"He is giving successor Chuck Robbins a strong hand. Three of a kind-Robbins takes it to a full house!" he added.
Cramer thinks Chambers has put Cisco in a very strong position as he transitions the company to Robbins, who he believes can take the company to the next level.
For the fiscal third quarter, the company earned 54 cents a share, above analysts' estimates of 53 cents a share.
Revenue grew 4.9% year over year to $12.14 billion for the quarter, compared to analysts' estimates of $12.07 billion.
Cisco designs, manufactures, and sells Internet protocol-based networking and other products related to the communications and information technology industry.
The company also has a line of products for transporting data, voice, and video around the world, operating in the Americas, Europe, Middle East, Africa, Asia Pacific, Japan, and China. It is based in San Jose, Calif.
Last night Cisco (CSCO:Nasdaq) delivered solid results, with fiscal third quarter ahead of expectations and fourth-quarter guidance in line with consensus. It was the perfect exit for CEO John Chambers as he passes on the baton to CEO-designate Chuck Robbins, starting July 28. But given the lofty expectations heading into the print, we would not be surprised to see shares take a breather here.
There were a few familiar themes in the quarter: the growth drivers of data center, security and mobility performing well, collaboration stabilizing and Cisco ACI showing solid momentum. But emerging markets (EM) and service providers (SP) remain challenged, with EM orders flat y/y with BRICs and Mexico down 6% y/y and SP orders down 7% y/y, with U.S. SP down 17% y/y. But ultimately, Cisco continues to disprove the bears, showing remarkable stability in margins and switching revenues.
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Separately, TheStreet Ratings team rates CISCO SYSTEMS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate CISCO SYSTEMS INC (CSCO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, notable return on equity, attractive valuation levels and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
You can view the full analysis from the report here: CSCO Ratings Report