Cisco Pops Onto Goldman Buy List
Updated from 9:17 a.m. EDT
Fresh off Monday's
fanfare around its server introduction
,
Cisco
(CSCO) - Get Report
was placed on Goldman Sachs' conviction buy list Tuesday with a price target of $18.
The move adds Cisco to a list of tech stocks, including communications chipmaker
PMC-Sierra
(PMCS)
, which was added last week, and
Motorola
(MOT)
, which made the list in January.
In a somewhat apt switch, Goldman dropped
Hewlett-Packard
(HPQ) - Get Report
from its list last week. The shift coincides with Cisco's bold and somewhat risky strategy to attack H-P's network server turf.
The listing gave Cisco's stock a little pop Tuesday, nudging the price up 27 cents, or 2%, to $15.72 in pre-market trading. It rose from there to close at $16.14.
Not every analyst was jazzed about Cisco's new server plan, however.
In a note Tuesday, JPMorgan analyst Ehud Gelblum reaffirmed his neutral rating on Cisco, citing new concerns about the direction of the business.
"We believe Cisco is entering a dangerous new world by locking horns with HP and quite likely
IBM
(IBM) - Get Report
," Gelblum writes. The effort "could take five-to-seven years just to break even on the earnings per share line, let alone generate a penny of incremental earnings," Gelblum concludes.
