Boston, MA 02/13/2014 (wallstreetpr) – Cisco Systems, Inc. (NASDAQ:CSCO) which manufactures and sells internet protocol has received the wrath of Wall Street especially JPMorgan, after being downgraded from a neutral rating to an Underweight. The company continues to show weakness in emerging markets something that is of the highest concern. Concerns have also been raised as result of its switching market spending, being negative. JPMorgan have also lowered their December 2014 price tag for the company to $17.
Causes of the lower rating
Cisco Systems, Inc. (NASDAQ:CSCO) showed weakness in emerging markets with its quarter earnings that are supposed to be the key, if the company is to report positive results. The company has also been reporting delayed spending in the switching market mostly driven by its negative SDN.
According JPMorgan, Cisco Systems, Inc. (NASDAQ:CSCO) revenue is set to continue declining in the current fiscal year with Indian SP’s revenue expected to hit lows, with a decline of 5.3%. The analyst firm strongly believe that the negative revenue trends combined with weak local currencies could highly affect Cisco systems, driving its capital spending further into the drain.
Another problem that could face Cisco Systems, Inc. (NASDAQ:CSCO) in the coming future is the pausing of the US market for much of the current fiscal year with its product not expected to be shipped till April or May. Cisco second quarter results were not as impressive as one would have wished with sales slumping by 8% to $11.2 billion and non GAAP earnings also dropping by 8%.
Analysts expect sales for the third quarter to fall even further by roughly 7% on a year over year, yielding about $0.48 on non-GAAP earnings per share. This is one of the main reason that investors need to tread lightly with the company stock
Cisco Systems, Inc. (NASDAQ:CSCO) shares stabilized on Wednesday trading session slightly moving up by 0.62% to close the day at $22.5 per share
