to buy Thursday on expectations for a rebound in the enterprise hardware market next year.
The brokerage cited recent positive comments from
and its own poll of technology buyers to support its recovery thesis.
Merrill also expects Cisco to keep costs under control as revenue rises. It raised its fiscal 2004 and fiscal 2005 EPS estimates to 73 cents and 85 cents, respectively, from the previous 70 cents and 74 cents.
Merrill set a $29 price target on the shares, reflecting a multiple of 30 to 35 times its 2005 earnings estimate. The shares were recently up 53 cents, or 2.3%, to $23.83.