The firm maintained its "overweight" rating on the San Jose, CA-based technology company but raised its 2017 earnings estimates to $2.44 per share from $2.42 per share based on stronger gross margin assumptions.
Barclays noted that Cisco's EBITDA multiples could increase even further as large cap investors look for stable margin and cash flow stories with less cloud disruption risk.
"With technology categories converging due to the cloud, we think a similar argument can be made for Cisco's valuation metrics to be the next large cap tech stock to rerate higher, given its margin profile and the model's ability to support cloud build-outs from an infrastructure perspective," the firm continued in an analyst note.
However, Cisco doesn't play a role as primary cloud provider as Microsoft (MSFT) does with its Azure cloud computing service. This is likely to perpetuate a valuation gap between the two, Barclays said.
Additionally, Cisco is slated to report fourth quarter results after Wednesday's market close.
Wall Street is looking for the company to report earnings of 60 cents per share on $12.57 billion in revenue. Last year, Cisco posted earnings of 59 cents per share on $12.84 billion in revenue.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate CISCO SYSTEMS INC as a Buy with a ratings score of A-. 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 notable return on equity, attractive valuation levels, expanding profit margins, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: CSCOCSCO data by YCharts