Cisco Systems (NASDAQ:CSCO) Shares Break Below 200-Day Moving Average After Analyst Downgrade

Key Points

• Cisco shares fell below their 200-day moving average, trading as low as $95.43, after Morgan Stanley downgraded the stock from Overweight to Equal Weight and cut its price target from $135 to $120.
• Morgan Stanley cited concern that faster AI-infrastructure growth could bring a less profitable product mix, pressuring gross margins and earnings growth, particularly in fiscal 2028.
• Analyst sentiment remains broadly positive: Cisco has a “Moderate Buy” consensus rating and an average price target of $127.87, despite the downgrade.

Shares of Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report) crossed below its 200-day moving average during trading on Thursday after Morgan Stanley downgraded the stock from an overweight rating to an equal weight rating. The stock has a 200-day moving average of $101.53 and traded as low as $95.43. Morgan Stanley now has a $120.00 price target on the stock, down from their previous price target of $135.00. Cisco Systems shares last traded at $95.72, with a volume of 37,423,517 shares trading hands.

Other analysts also recently issued reports about the company. Sanford C. Bernstein assumed coverage on Cisco Systems in a research report on Wednesday, September 30th. They issued a "market perform" rating and a $110.00 price target for the company. Deutsche Bank Aktiengesellschaft began coverage on shares of Cisco Systems in a research report on Tuesday, September 1st. They set a "buy" rating and a $135.00 price objective on the stock. Piper Sandler reduced their target price on shares of Cisco Systems from $132.00 to $125.00 and set a "neutral" rating on the stock in a research note on Tuesday, September 22nd. Freedom Capital raised shares of Cisco Systems from a "hold" rating to a "strong-buy" rating in a research note on Sunday, August 16th. Finally, UBS Group raised their target price on shares of Cisco Systems from $132.00 to $138.00 and gave the stock a "buy" rating in a report on Thursday, August 13th. Three equities research analysts have rated the stock with a Strong Buy rating, fifteen have given a Buy rating and eight have assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $127.87.

Insider Transactions at Cisco Systems

In related news, CEO Charles Robbins sold 21,628 shares of the business's stock in a transaction on Friday, August 14th. The stock was sold at an average price of $111.54, for a total transaction of $2,412,387.12. Following the completion of the transaction, the chief executive officer owned 602,710 shares in the company, valued at $67,226,273.40. The trade was a 3.46% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Thimaya K. Subaiya sold 312 shares of the company's stock in a transaction on Monday, September 14th. The shares were sold at an average price of $110.18, for a total value of $34,376.16. Following the completion of the transaction, the executive vice president directly owned 127,661 shares in the company, valued at $14,065,688.98. This trade represents a 0.24% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 44,869 shares of company stock valued at $5,005,620. Company insiders own 0.01% of the company's stock.

Key Stories Impacting Cisco Systems

Here are the key news stories impacting Cisco Systems this week:

• Positive Sentiment: Cisco was named a leader in ABI Research’s Open Line Systems ranking for data center interconnects, supporting its positioning in optical networking as AI drives demand for data center connections. Article: Ciena, Nokia, and Cisco Named Leaders in ABI Research’s Open Line Systems for Data Center Interconnect Scale-Across Ranking
• Positive Sentiment: Spectrum Business introduced a managed secure-networking service using Cisco routers and security software, creating a new channel to sell Cisco solutions to businesses building AI-focused infrastructure. Article: Cisco Systems Expands Into Managed Secure Networking For AI Enterprise Infrastructure
• Neutral Sentiment: Cisco reports Q3 results on November 12. Wall Street expects earnings growth, while options traders are pricing in a potentially sizable post-report move; the coverage also notes Cisco may lack indicators associated with a likely earnings beat. Article: Cisco Systems Set for Near 11% Move After Q3 Earnings Next Week Article: Cisco Systems Reports Next Week: Wall Street Expects Earnings Growth
• Negative Sentiment: Morgan Stanley cut its rating on Cisco from Overweight to Equal Weight and lowered its price target from $135 to $120. The firm sees risk that faster AI infrastructure revenue growth brings a less profitable product mix, squeezing gross margins and earnings growth, particularly in fiscal 2028. Article: Morgan Stanley Downgrades Cisco On AI Impacting Gross Margins
• Negative Sentiment: The downgrade coincided with a broader pullback in AI infrastructure stocks, adding sector-wide pressure to Cisco’s shares. Article: Cisco Falls on Morgan Stanley Downgrade; Networking Stocks Retreat

Institutional Trading of Cisco Systems

Large investors have recently made changes to their positions in the stock. Halbert Hargrove Global Advisors LLC increased its stake in shares of Cisco Systems by 142.5% in the third quarter. Halbert Hargrove Global Advisors LLC now owns 257 shares of the network equipment provider's stock worth $28,000 after buying an additional 151 shares during the last quarter. Kings Path Partners LLC bought a new position in shares of Cisco Systems during the third quarter valued at approximately $31,000. Blueline Advisors LLC bought a new position in Cisco Systems during the 3rd quarter worth $32,000. GK Wealth Management LLC bought a new position in Cisco Systems during the 3rd quarter worth $37,000. Finally, Manning & Napier Advisors LLC grew its stake in Cisco Systems by 137.0% during the 1st quarter. Manning & Napier Advisors LLC now owns 346 shares of the network equipment provider's stock worth $27,000 after buying an additional 200 shares during the last quarter. 73.33% of the stock is owned by hedge funds and other institutional investors.

Cisco Systems Price Performance

The company has a debt-to-equity ratio of 0.39, a current ratio of 0.93 and a quick ratio of 0.79. The company has a 50-day simple moving average of $109.18 and a two-hundred day simple moving average of $101.53. The stock has a market capitalization of $377.38 billion, a price-to-earnings ratio of 28.66, a price-to-earnings-growth ratio of 2.16 and a beta of 1.01.

Cisco Systems (NASDAQ:CSCO - Get Free Report) last posted its earnings results on Wednesday, August 12th. The network equipment provider reported $1.22 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.17 by $0.05. Cisco Systems had a net margin of 20.95% and a return on equity of 30.16%. The firm had revenue of $17.25 billion during the quarter, compared to analyst estimates of $16.84 billion. During the same period in the previous year, the business posted $0.99 EPS. Cisco Systems's revenue was up 17.6% on a year-over-year basis. Cisco Systems has set its FY 2027 guidance at 5.050-5.110 EPS and its Q1 2027 guidance at 1.320-1.340 EPS. On average, equities research analysts predict that Cisco Systems, Inc. will post 4.42 earnings per share for the current year.

Cisco Systems Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Wednesday, October 21st. Stockholders of record on Friday, October 2nd were given a dividend of $0.42 per share. The ex-dividend date of this dividend was Friday, October 2nd. This represents a $1.68 dividend on an annualized basis and a dividend yield of 1.8%. Cisco Systems's payout ratio is 50.30%.

Cisco Systems Company Profile

Cisco Systems, Inc is a global technology company that develops networking, cybersecurity, collaboration and observability solutions for businesses, government organizations and service providers. Its offerings include routers, switches, wireless networking equipment, data-center infrastructure, security software and services, as well as technologies that support cloud and hybrid IT environments.

The company also provides collaboration tools through its Webex portfolio, cloud-managed networking through Cisco Meraki and security and observability capabilities that include technologies from Splunk, which Cisco acquired in 2024.

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