Cisco dips after rating cut at Evercore

Evercore downgraded Cisco Systems’ (NASDAQ:CSCO) rating to In Line from Outperform but maintained its $72 price target on the stock.

Shares of the networking services provider dipped about 1% premarket on Monday.

“We think the management team has done a solid job in gaining traction in cloud/AI markets and the overall company strategy remains solid, but we think the upside is largely priced in, creating a more balanced risk/reward over the next twelve months,” said analysts led by Amit Daryanani.

The analysts noted they were downgrading Cisco to In Line as the stock is within 6% of their price target of $72. The stock has performed well recently, with a +46% move over the last 12 months versus +17% for the S&P.

The analysts added that the upside has been driven by a cyclical recovery in their core enterprise networking business and a compelling narrative around cloud and AI markets. Cisco’s AI narrative has gained some steam from disclosing AI order figures.

Other AI-levered names have seen more sizable multiple expansion, but the analysts think Cisco will struggle to get credited as an AI winner without disclosing AI revenue numbers. So far, Cisco has only disclosed AI orders, and it does not look as though they plan to disclose revenue, according to the analysts.

Daryanani and his team noted that other factors that make them hesitant to raise their price target include — more challenging order growth comps; continued underperformance in Security and Observability segments; campus networking recovery thesis has largely played out and likely only has one to two more quarters driving outsized growth; and given the CFO transition, the probability increases that we get a more conservative guide versus expected for fiscal year 2026.