Now we are heading to stock market. It is reported on Wed, that shares of CISCO (CSCO) has become the top gainer on the Dow Jones Industrial Average. The CSCO shares is soaring due to investor speculated that Cisco (CSCO) shall pull out of some markets, particularly consumer. This speculation is fired up by Cisco CEO John Chambers’s vow to introduce big changes at the tech giant. Eventough Chambers did not elaborate on the changes, but some analysts believe the San Jose, Calif.-based company CSCO is considering scaling back by getting out of some businesses.
Read more after the break to find out more about Cisco (CSCO) stories.
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Shares of Cisco Systems jumped Wednesday as analysts speculated that Chief Executive John Chambers’s vow to introduce big changes at the tech giant means the company may pull out of some markets, particularly consumer.
Cisco’s (CSCO 17.96, +0.74, +4.30%) stock traded up nearly 4% to $17.89, becoming the top gainer on the Dow Jones Industrial Average.
In a memo to employees this week, Chambers said the company was “making a number of targeted moves” to regain its momentum and credibility in the market.
Chambers did not elaborate on the changes, but some analysts believe the San Jose, Calif.-based company is considering scaling back by getting out of some businesses.
“Cisco may re-examine its key business segments and narrow its focus to key markets and divest some businesses,” RBC Capital analyst Mark Sue wrote in a note titled, “The Gorilla Gets Its Forest in Order.”
A key area that some analysts see Cisco retreating from is the consumer market.
Cisco is known as the dominant player in the market for networking equipment, with a major presence in other arenas of corporate technology. But the company has also pushed aggressively into the consumer space where it now also offers such products as the Flip video camera, home networking gear and a consumer version of its Telepresence video-conferencing system.
Cisco had argued that growth in the consumer sector, particularly the rapid rise of video, helps its core businesses in networking and other areas of the data center.
But in a telephone interview Matt Robison of Wunderlich Securities said, “I don’t think Cisco needs to be a player in consumer electronics now that we have smartphones and tablets. I think it becomes tougher to justify the investment to become a consumer electronics company.”
Getting out of that arena could help Cisco, he added, since that business “is a significant factor in their gross margins.”
In a note, Wedbush analyst Rohit Chopra wrote that among the “bold and tough decisions” Chambers alluded to may be “the exit of key segments of the consumer business,” such as the Flip video camera, set-top boxes and the Umi, Cisco’s consumer video-conferencing system.
Canaccord Genuity analyst Paul Mansky also sees “more questions than answers at this point.”
“At the same time, the ‘credibility’ comments are raising hopes that Cisco will finally back off what is widely viewed as an unachievable growth target of 12-17%,” he wrote in an email. “This has been a major source of overhead for better part of the last year.”
In his memo, Chambers acknowledged that “we have lost some of the credibility that is foundational to Cisco’s success — and we must earn it back.”
Recently, Cisco also appeared to back away from an earlier long-term target of 12% to 17% annual top-line growth.
Cisco has said it sees growth for its current fiscal year of 9% to 12%. In its last earnings call, management narrowed that target, saying it sees growth at the middle to the lower end of that range.
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These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Tuesday morning.
Accenture plc (NYSE: ACN) Reiterated Outperform at Credit Suisse.
Central European Media Enterprises (NASDAQ: CETV) Started at Hold at Jefferies.
Cisco Systems, Inc. (NASDAQ: CSCO) Started as Neutral at Gleacher & Co.
Citigroup Inc. (NYSE: C) Raised to Outperform at Bernstein.
Dell Inc. (NASDAQ: DELL) Started as Neutral at Cowen.
Discover Financial Services (NYSE: DFS) named as Bull of the Day at Zacks.
J.P. Morgan Chase & Co. (NYSE: JPM) Started as Outperform at Macquarie.
Las Vegas Sands Corp. (NYSE: LVS) Reiterated Outperform at Credit Suisse.
Marriott International Inc. (NYSE: MAR) Cut to Hold at Argus.
Niska Gas Storage Partners LLC (NYSE: NKA) Cut to Neutral at Credit Suisse.
Occidental Petroleum Corporation (NYSE: OXY) Cut to Sector Perform at RBC Capital.
Texas Instruments Inc. (NYSE: TXN) Reiterated Outperform and $40 target at Credit Suisse; Maintained Buy and raised target to $42 at Gleacher & Co.
Universal Tech Institute Inc. (NYSE: UTI) named Bear of the Day at Zacks.
Wells Fargo & Co. (NYSE: WFC) Started as Outperform at Macquarie.
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Source
http://www.marketwatch.com/
http://247wallst.com/
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I hope above articles can provide users with information increased value of Cisco (CSCO) shares.
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