Analyst Calls Cisco a Safe Haven Before Earnings

Morgan Stanley’s Ehud Gelblum reiterated an Overweight rating on shares of Cisco Systems (NASDAQ:CSCO), and a $21 price target. But Gelbum cut his estimates for Cisco’s October-ending fiscal Q1 and Q2 based on “checks” showing the service provider telco market continues to display weakness — and that market accounts for about one-third of Cisco’s revenue.

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“Combined capex from AT&T (NYSE:T) and Verizon Communications (NYSE:VZ) is growing,” he suggested, “with just $565M q/q in CQ4’11 vs. $1,600M in CQ4’10, a 65% decline y/y.” He cut his fiscal Q1 estimate by a penny to 38 cents, and cut his Q2 view by a penny to 40 cents.

“Nevertheless, Gelblum maintains that Cisco is a “safe haven” and investors should look ahead to when order growth accelerates,” according to Barron’s.

Here’s how these companies are trading ahead of Cisco earnings:

  • Cisco Systems, Inc. (NASDAQ:CSCO): The shares recently traded at $18.31, up $0.3, or 1.67%. Its market capitalization is $98.56 billion. They have traded in a 52-week range of $13.30 to $24.60. Volume today was 50,386,617 shares versus a 3-month average volume of 67,637,300 shares. The company’s trailing P/E is 15.65, while trailing earnings are $1.17 per share. The company pays a dividend of $0.24 per share for a dividend yield of 1.30%. About the company: Cisco Systems, Inc. supplies data networking products for the Internet. The Company’s Internet Protocol-based networking solutions are installed at corporations, public institutions and telecommunication companies worldwide. The Company’s solutions transport data, voice, and video within buildings, across campuses, and around the world. Get the most recent company news and stock data here >>
  • AT&T, Inc. (NYSE:T): The shares recently traded at $29.46, up $0.02, or 0.07%. Its market capitalization is $174.58 billion. They have traded in a 52-week range of $27.20 to $31.94. Volume today was 20,806,695 shares versus a 3-month average volume of 34,099,600 shares. The company’s trailing P/E is 14.95, while trailing earnings are $1.97 per share. The company pays a dividend of $1.72 per share for a dividend yield of 5.90%. About the company: AT&T Inc. is a communications holding company. The Company, through its subsidiaries and affiliates, provides local and long-distance phone service, wireless and data communications, Internet access and messaging, IP-based and satellite television, security services, telecommunications equipment, and directory advertising and publishing. Get the most recent company news and stock data here >>
  • Verizon Communications Inc. (NYSE:VZ): The shares recently traded at $37.52, up $0.18, or 0.48%. Its market capitalization is $106.22 billion. They have traded in a 52-week range of $31.60 to $38.95. Volume today was 9,897,020 shares versus a 3-month average volume of 18,601,600 shares. The company’s trailing P/E is 15.09, while trailing earnings are $2.49 per share. The company pays a dividend of $2.00 per share for a dividend yield of 5.40%. About the company: Verizon Communications Inc. is an integrated telecommunications company that provides wire line voice and data services, wireless services, Internet services, and published directory information. The Company also provides network services for the federal government including business phone lines, data services, telecommunications equipment and payphones. Get the most recent company news and stock data here >>

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