Stockchase Research Editor: Michael O'Reilly Despite the negative price action following most recent earnings, we see CSCO as a Top Pick -- with upside over 15%. We like the yield and feel the cash flow supports its level and may lead to another increase as it has for the past 9 consecutive years. EPS and revenue both beat analyst expectations. The company is achieving goals of moving to a more subscription based revenue model for its software -- now representing 78% of revenue in that category. Analysts were negative on the next quarter outlook, but that can be attributed to the continuation of the pandemic slowdown of the economy. We would trade this with a relatively tight stop-loss at $40. Yield 2.99% (Analysts’ price target is $49.35)
Allan Tong’s Discover PicksCisco makes it to our Top Dividend Stock list. True, this American IT company doesn’t pay a divvy like a Canadian bank, but analysts such as Darren Sissons and Lorne Steinberg expect Cisco’s 3.09% to continue to grow along with the company’s free cash flow. Read Best Dividend Stocks Canada for our full analysis.
5G? CSCO has a 14 times PE ratio and 2.8% dividend yield. They have been able to grow by buying a lot of companies. 5G spending may get delayed in to 2021, so this may reduce earnings this year. They have made acquisitions to be able to compete with their peers.
He owns this in their large cap portfolio. The company is positioning itself well for 5G connectivity. They have had to pivot from being the back bone of the router space to now also be a software company. Webex is a popular video platform during COVID-19. It is not very a very expensive multiple. Only about 3% of their revenue is tied to China. He would be a buyer here.
5G deployment is a key theme for him right now. NOK and CSCO are others in the space. He much prefers ERIC overall -- he thinks it could go to $12 per share.
Managers have done a great job morphing into cybersecurity. Yes, Cisco will be impacted by current spending on IT (with flat or slightly declining revenues this year), but Cisco will remain a huge cash flow and dividend grower. There's strong demand for internet security which definitely benefits Cisco.
They report tomorrow and he expects mixed results, but overall he likes this company. Cisco has suffered a little from the lockdown, but videos shot for interviews are using Cisco equipment. This is a boom for the company.
(A Top Pick Mar 04/19, Down 22%) Some cyclicality to its earnings, but will stick with it. They will still buyback stock and increase margins, and it's trading at 13.5x free cash flow (Analysts’ price target is $53.00)
They are the leader in end to end IT security. There has been a selloff because of a weaker economy. They will raise their dividend double digits until the cows come home. (Analysts’ price target is $51.43)
Problem is all the big techs had a big run. Long-term trajectory is up and to the right. Dividend should slowly grow. A better entry point would make this a core holding. Challenge is they need a new product as a catalyst.
It's had a tough time, but new management have turned this from a stodgy company selling old technology to one that's poised to take advantage of the 5G revolution. It trades at 14x earnings. Buy and be patient. (Analysts’ price target is $51.43)
He has a 1.8% position in his portfolio. They are skewed to the 5G movement. They have tried to do what MSFT did, ramping up software and cyber-security, but have not been as successful.
Cisco is a American stock, trading under the symbol CSCO (previously CSCO-Q on Stockchase) on the NASDAQ (CSCO). It is usually referred to as NASDAQ:CSCO or CSCO
Is Cisco a buy or a sell?
20 expert ratings on Cisco (CSCO) in the last 12 months: 16 Buy, 1 Hold, 3 Sell. Latest rating: TOP PICK by The Panic-Proof Portfolio (Stockchase Research) on Aug 13, 2020. Read the latest stock experts' ratings for Cisco.