Exchange traded funds that invest in Nasdaq stocks will figure prominently this week as tech giant Cisco (NasdaqGS: CSCO) trots out its quarterly numbers. One Wall Street analyst trimmed his price target on the stock ahead of the results on Wednesday.
“We believe recent restructuring announcements reflect management awareness of an increasingly competitive environment that mandates focus and enhanced productivity,” said Matthew S. Robinson at Wunderlich Securities in a note Monday. He lowered his price target on the stock to $20 from $24. Cisco shares were fractionally lower Monday morning.
“We believe the industry is evolving with replacement opportunities that will result in overall growth, but with more competition and less market share for Cisco. The reduction of our target price is a function of a shorter-term horizon (12 months from 18 months) and a reduction of our growth forecast for periods beyond 2012,” wrote the analyst, who kept his holding rating on Cisco.
Cisco is a key component in tech-sector ETFs and also represents nearly 4% of the highly traded PowerShares QQQ (NasdaqGM: QQQ).
Wall Street is looking for earnings of 37 cents a share from Cisco.
“We think the company will report results better than many fear, but still believe the long term outlook remains challenging,” Deutsche Bank said in an earnings outlook.
“We think the company has also shed costs in the last two quarters which should help margins. Despite this the company still faces considerable uncertainty in some of their core markets,” said Deutsche Bank, which also has a hold rating on Cisco shares.
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.