Cisco (CSCO) is scheduled to report results of its fiscal third quarter after the market closes on May 14 with a conference call scheduled for 4:30 pm ET. What to watch for:
GUIDANCE: Along with its last report, Cisco guided for Q3 adjusted earnings per share of 90c-92c on revenue of $13.9B-$14.1B. At the time, analysts were expecting the company to report Q3 EPS of 90c on revenue of $13.88B, but those figures have since risen to 92c and $14.06B.
BUYBACK/DIVIDEND: Cisco also announced with itts last report that the company had declared a quarterly dividend of 41c per common share, a 1c increase or up 3% over the previous quarter’s dividend, to be paid on April 23, 2025, to all stockholders of record as of the close of business on April 3, 2025. Future dividends will be subject to Board approval. Cisco’s board of directors has also approved a $15B increase to the authorization of the stock repurchase program. There is no fixed termination date for the repurchase program. The remaining authorized fixed amount for stock repurchases including the additional authorization is approximately $17B.
TARGET CUTS: Multiple analysts have cut their price targets on Cisco in the weeks leading up to the company’s Q3 report. In early April, Piper Sandler analyst James Fish lowered the firm’s price target on Cisco to $60 from $72 and kept a Neutral rating on the shares. Following its Q1 2025 on-calendar infrastructure checks, the firm is broadly reducing its estimates and price targets throughout the space given underlying macro-pressures that is seeing sales cycles extend. Piper is lowering its new-business and expansionary assumptions across the group, but FX headwinds have largely reversed.
That same week, Morgan Stanley analyst Meta Marshall reduced the firm’s price target on Cisco to $65 from $68 and maintained an Overweight rating on the shares. Tariffs add more uncertainty into the networking spending market, where demand intentions were “strong, but weakening,” the analyst tells investors. The breadth of the tariffs announced on April 2 “leave little room to hide,” challenging margins, demand or both, the analyst added in a note on the telecom and networking equipment group.
Citi also lowered the firm’s price target on Cisco to $68 from $73 and kept a Buy rating on the shares. The firm expects a rally in the North America communications equipment group on the Trump administration reciprocal tariff exemptions on PCs, smartphones, and 20 other products announced over the weekend. That said, Citi lowered its data center capex and PC models to reflect “macro induced “weak demand. The firm prefers artificial intelligence server exposed stocks to enterprise, saying many enterprises maintain a fixed IT budget and will be reluctant to raise capex in response to price increases. The analyst expects the consumer segment to get “hit the worse” on inflation and lower demand.
Meanwhile, JPMorgan analyst Samik Chatterjee lowered the firm’s price target on Cisco to $70 from $73 and reiterated an Overweight rating on the shares. The firm updated hardware and networking models to reflect its best view of the second order impact of the current macro uncertainty stemming from tariffs. JPMorgan now embeds a broader macro slowdown and associated demand moderation across most customer verticals into its estimates. The analyst expects a macro slowdown to lead to lower demand from consumers, as well as enterprises and telecom customers.
Additionally, Rosenblatt analyst Mike Genovese lowered the firm’s price target on Cisco to $63 from $80 and kept a Buy rating on the shares. The firm believes the March quarter results will be “generally solid” for the optical sector. However, none of the companies are immune to the negative impact to gross margins from higher tariffs, or from a meaningful macro slowdown, related to higher prices and general business environment uncertainty, likely to hit in the second half of 2025, the analyst tells investors in a research note. As such, Rosenblatt cut price targets in its coverage by an average of 19%.
MELIUS: In late March, Melius Research analyst Ben Reitzes reiterated a Buy rating and $79 price target on shares of Cisco, highlighting three reasons to like the stock, whose “story may creep up on you quickly in CY25.” The firm cites a series of recent deals with Nvidia (NVDA) that it argues give Cisco “a shot to be on the right side of AI in the enterprise,” as well as a major campus switch refresh in the second half of calendar 2025 that it says “should bode well for a pickup in networking orders.” In addition, the security strategy is “finally taking hold,” which the firm thinks likely helps the multiple. “In short, Cisco is attractively priced and could be in the early innings of rerating,” the analyst told investors.
AI/MIDDLE EAST: This week, Cisco announced a series of strategic initiatives across all phases of the AI revolution in the United States and in the Middle East region. These new initiatives place Cisco at the center of the AI revolution in the Gulf, providing world class and trusted technology together with other Cisco partners, the company said. The announcements this morning follow the visit last week by CEO Chuck Robbins to Saudi Arabia, UAE, Qatar, and Bahrain, and the visit today by Jeetu Patel, EVP and Chief Product Officer, to Saudi Arabia, where he is participating in President Trump’s state visit to the region. Cisco said it will collaborate with the AI Infrastructure Partnership, which is led by BlackRock (BLK), Global Infrastructure Partners, MGX, Microsoft (MSFT), Nvidia, and xAI. AIP will initially seek to unlock $30B in capital from investors, asset owners, and corporations. Cisco’s addition as a technology partner to AIP, further strengthens the AIP platform as it seeks to invest in secure, efficient and scalable infrastructure to support AI workloads. Cisco also has announced to join a groundbreaking initiative with HUMAIN, Saudi Arabia’s new AI enterprise to help build the world’s most open, scalable, resilient and cost-efficient AI infrastructure. Additionally, Cisco will extend strategic partnership with G42 to further advance AI innovation and infrastructure development in the UAE. The collaboration focuses on Cisco’s comprehensive secure AI portfolio and AI-native solutions and services and G42’s deep regional roots, AI infrastructure expertise, and expanding global footprint including a potential joint Go-To-Market initiative. Qatar’s Ministry of Interior and Cisco signed a letter of intent to collaborate on Qatar’s digital transformation, AI, infrastructure development and cybersecurity.
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