Quarterly earnings expected Wednesday from Cisco (NasdaqGS: CSCO) will set the tone in exchange traded funds tracking technology and Nasdaq-listed stocks the rest of the week.
Cisco is slated to announce fiscal third-quarter results after the closing bell. Wall Street analysts are looking for earnings of 37 cents a share, on average.
“We suggest that investors who are able to stomach the risks inherent in a company that is restructuring its operations and has pockets of weak demand consider buying ahead of earnings,” said BGC Partners, which initiated coverage of Cisco this week. The analysts have a buy rating and a 12-month price target of $24 on the stock, representing 36% upside.
“We expect to see Cisco exhibit tighter control of its operating expenses while its gross margins grow out of the recent trough caused by new products,” BGC added.
Cisco shares have climbed above their 50-day moving average, a key technical level.
Analysts at Wunderlich Securities trimmed their longer-term growth forecasts for Cisco, however, ahead of the earnings report.