Piper Sandler has increased Cisco’s price target to $52 from $51 and has maintained a Neutral rating on the stock. The company’s shares rose by 5% after the third-quarter results, which showed a relatively in-line organic quarter and guidance. Piper Sandler noted that there was improving outbound demand and multiple leadership metrics that exceeded buyers’ expectations. However, the organic lead metrics were not as impressive, indicating core weaknesses in networking, security, and collaboration.
The firm anticipates several discussions in the upcoming weeks leading to the June 4 analyst day. These discussions will focus on whether the organic business can demonstrate normalized growth in FY25, the potential decline in earnings per share due to an implied operating expense ramp in FY25, the integration of Splunk and the changing competitive landscape, the trajectory of organic security, and sustainable growth rates and margins beyond FY25.
In summary, Piper Sandler’s price target increase for Cisco reflects a positive outlook for the company following the third-quarter results. The firm highlights the improvements in outbound demand and leadership metrics, but also points out weaknesses in networking, security, and collaboration. Discussions ahead of the analyst day will center around various factors that could impact Cisco’s growth and earnings potential in the future.
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