Proactive Investors - Cisco Systems Inc (NASDAQ:CSCO, ETR:CIS) has received backing from Bank of America (NYSE:BAC) analysts after beating expectations with third-quarter results on Wednesday.
Bank of America reiterated a ‘buy’ rating for the communications technology firm following the results, alongside a US$60 share price target, against US$49.67 at Wednesday’s close.
Cisco had unveiled a 13% drop in revenue over the quarter to US$12.7 billion on Wednesday, though this was ahead of expectations for US$12.3 billion.
Analysts at the bank noted product revenue was also around US$70 million ahead of forecasts, while per-share earnings of US$0.88 beat estimates by US$0.06.
“While the outperformance was mostly on the back of previously reduced expectations, we highlight the expected growth acceleration in 2025,” analysts said.
This includes through an improved security portfolio, recovering orders for campus and data center switching, as well as for artificial intelligence networking products.
“Cisco launched five new security platforms in the last 12 months,” the bank noted, adding “security orders were ramping” and AI networking was another “opportunity, with line of sight to US$1 billion in orders by 2025”.
The integration of software company Splunk is also going well, the bank continued, aiding gross margins to 68.3% alongside higher subscription revenues, better product mix, and lower freight costs.