Cisco Stock (NASDAQ:CSCO)
As the supply chain continues to strengthen after the pandemic, Cisco Systems (NASDAQ:CSCO) will announce its fiscal third-quarter earnings on Wednesday after the market closes.
Simon Leopold, an analyst at Raymond James, has an outperform rating and a $63 price target per share on Cisco stock because he is "optimistic" that the company will meet or exceed quarterly expectations and keep sales growth around 10%.
Still, "we still worry about the macro catching up with Cisco in [calendar 2023] and/or investors taking their queue from backlog reduction, similar to Juniper," as Leopold said in a message to investors. "Investor mood has turned negative, but industry indicators hold up well."
Analysts anticipate Cisco (NASDAQ:CSCO) to post adjusted earnings of 97 cents per share on sales of $14.36 billion, up around 11.9% year over year.
Cisco (NASDAQ:CSCO) projected in February that it would earn 96 cents to 98 cents a share in its fiscal third quarter, excluding one-time items, on sales growth of 11% to 13% year over year.
Meta Marshall, an analyst at Morgan Stanley, has a $55 price objective on Cisco stock and predicts worsening circumstances. However, he sees potential for improvement in security expenditure.
We expect the backlog to continue to provide support to revenue in [the third quarter], putting more risk on the orders number as checks continue to point to softer enterprise demand, and while federal strength provides a benefit to CSCO, not likely enough to offset (particularly given service provider/cloud headwinds)," Marshall wrote in an investor note.
Marshall said that although the backlog is sufficient to maintain revenue for now, a faster-than-planned fall due to tough order comparisons and a payment delay scheme might add up to a dismal fiscal year in 2024.
Samik Chatterjee, a Cisco (NASDAQ:CSCO) analyst at J.P. Morgan with a neutral rating and a $55 price target per share, has indicated that investors may not hoot about the quarterly results or even a prospective guidance raise if they are only focused on orders.
In a letter to investors, Chatterjee predicted that a recurrence of the -22% year-over-year order reduction would confirm a considerably weaker demand outlook.
According to Chatterjee, Cisco (NASDAQ:CSCO) likely saw a "robust pace" in orders for the first few days of the quarter. However, some of Cisco's competitors had weaker-than-expected orders from business and cloud clients, which might cause worry.
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