Cisco Systems (NASDAQ:CSCO) Shares Down 4.5% Following Analyst Downgrade

Key Points

• Cisco shares fell 4.5% to $106.44 after Piper Sandler cut its price target from $132 to $125 while maintaining a neutral rating. Trading volume rose 42% above the average session volume.
• Despite the downgrade, Cisco reported strong quarterly results, with revenue up 17.6% year over year to $17.25 billion and adjusted EPS of $1.22 beating estimates. Analysts maintain a “Moderate Buy” consensus with an average price target of $129.36.
• Investor caution was also influenced by concerns that networking-industry growth may be peaking and by recent insider share sales under prearranged Rule 10b5-1 plans, although Cisco continues to benefit from its Splunk integration, cybersecurity strategy and enterprise-AI opportunities.

Cisco Systems, Inc. (NASDAQ:CSCO - Get Free Report)'s stock price fell 4.5% during trading on Tuesday after Piper Sandler lowered their price target on the stock from $132.00 to $125.00. Piper Sandler currently has a neutral rating on the stock. Cisco Systems traded as low as $104.51 and last traded at $106.44. Approximately 32,301,329 shares were traded during mid-day trading, an increase of 42% from the average session volume of 22,758,711 shares. The stock had previously closed at $111.46.

Other analysts also recently issued reports about the company. Zacks Research downgraded Cisco Systems from a "strong-buy" rating to a "hold" rating in a research note on Tuesday, August 4th. HSBC lowered Cisco Systems from a "buy" rating to a "hold" rating and dropped their price objective for the company from $137.00 to $120.00 in a research note on Friday, August 14th. UBS Group increased their price target on shares of Cisco Systems from $132.00 to $138.00 and gave the company a "buy" rating in a research report on Thursday, August 13th. Rosenblatt Securities boosted their price objective on shares of Cisco Systems from $150.00 to $165.00 and gave the company a "buy" rating in a research report on Thursday, August 13th. Finally, The Goldman Sachs Group raised their price objective on shares of Cisco Systems from $116.00 to $125.00 and gave the stock a "neutral" rating in a report on Wednesday, June 3rd. Two investment analysts have rated the stock with a Strong Buy rating, sixteen have given a Buy rating and seven have issued a Hold rating to the company's stock. According to MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average price target of $129.36.

Insider Buying and Selling

In other news, EVP Deborah L. Stahlkopf sold 6,487 shares of the stock in a transaction on Friday, August 14th. The shares were sold at an average price of $111.53, for a total value of $723,495.11. Following the sale, the executive vice president owned 167,116 shares in the company, valued at $18,638,447.48. This represents a 3.74% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Thimaya K. Subaiya sold 5,832 shares of the stock in a transaction that occurred on Wednesday, August 19th. The shares were sold at an average price of $111.47, for a total value of $650,093.04. Following the transaction, the executive vice president owned 128,382 shares in the company, valued at $14,310,741.54. This trade represents a 4.35% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 44,869 shares of company stock worth $5,005,620 over the last ninety days. Corporate insiders own 0.01% of the company's stock.

Key Headlines Impacting Cisco Systems

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

• Positive Sentiment: Cisco’s latest results remain a fundamental support: quarterly revenue increased 17.6% year over year to approximately $17.25 billion, while adjusted EPS of $1.22 exceeded consensus by $0.05. The company also expects continued growth in fiscal 2027. Old Dogs, New Tech: 3 Legacy Stocks Powering the AI Boom
• Positive Sentiment: Cisco’s Splunk integration and security offerings continue to support its enterprise-AI strategy by helping customers monitor and protect data moving through corporate networks. This provides a longer-term growth opportunity beyond traditional networking hardware. Cisco Moves Higher as Splunk Takes Agents Behind the Firewall
• Neutral Sentiment: Piper Sandler maintained a “neutral” rating but lowered its CSCO price target to $125 from $132. The revised target remains above the stock’s approximately $106 trading level, although the reduction signals less confidence in near-term appreciation. Cisco stock sinks after Piper Sandler cuts price target
• Negative Sentiment: Analysts cited concerns that growth across the networking industry may be reaching a peak. That outlook is weighing on Cisco despite its strong recent results and has prompted profit-taking after the stock’s earlier rally. Cisco Sinks While the Tech Sector Rises
• Negative Sentiment: Recent insider filings show executives selling shares, including transactions by Cisco’s CFO and global sales chief under prearranged Rule 10b5-1 plans. While these sales are not necessarily discretionary bearish bets, the absence of reported insider purchases may be reinforcing investor caution. Cisco Falls as Insider Selling and Profit-Taking Weigh on Shares

Institutional Investors Weigh In On Cisco Systems

Several institutional investors have recently added to or reduced their stakes in the business. BlackRock Inc. purchased a new stake in Cisco Systems during the second quarter worth about $42,129,647,000. State Street Corp increased its position in Cisco Systems by 7.0% during the 2nd quarter. State Street Corp now owns 207,106,569 shares of the network equipment provider's stock worth $25,278,492,000 after purchasing an additional 13,512,872 shares in the last quarter. Invesco Ltd. raised its position in Cisco Systems by 11.6% in the fourth quarter. Invesco Ltd. now owns 59,836,782 shares of the network equipment provider's stock valued at $4,609,227,000 after purchasing an additional 6,224,062 shares during the period. Norges Bank acquired a new position in Cisco Systems in the 4th quarter worth $4,473,272,000. Finally, Auto Owners Insurance Co grew its holdings in Cisco Systems by 8,718.3% during the 4th quarter. Auto Owners Insurance Co now owns 51,952,421 shares of the network equipment provider's stock worth $400,190,000 after acquiring an additional 51,363,281 shares in the last quarter. Hedge funds and other institutional investors own 73.33% of the company's stock.

Cisco Systems Trading Down 4.5%

The company has a quick ratio of 0.79, a current ratio of 0.93 and a debt-to-equity ratio of 0.39. The firm's 50 day moving average is $112.87 and its two-hundred day moving average is $104.79. The stock has a market cap of $419.65 billion, a price-to-earnings ratio of 31.87, a price-to-earnings-growth ratio of 2.28 and a beta of 1.00.

Cisco Systems (NASDAQ:CSCO - Get Free Report) last released its quarterly earnings results on Wednesday, August 12th. The network equipment provider reported $1.22 earnings per share for the quarter, beating analysts' consensus estimates of $1.17 by $0.05. Cisco Systems had a return on equity of 30.16% and a net margin of 20.95%.The business had revenue of $17.25 billion during the quarter, compared to analyst estimates of $16.84 billion. During the same quarter last year, the company posted $0.99 EPS. Cisco Systems's revenue for the quarter 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. Equities analysts anticipate that Cisco Systems, Inc. will post 4.43 EPS for the current year.

Cisco Systems Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Wednesday, October 21st. Investors of record on Friday, October 2nd will be given a $0.42 dividend. This represents a $1.68 dividend on an annualized basis and a dividend yield of 1.6%. The ex-dividend date is Friday, October 2nd. Cisco Systems's dividend payout ratio (DPR) is currently 50.30%.

About Cisco Systems

Cisco Systems, Inc is a global technology company that provides networking, cybersecurity, collaboration, observability and other information technology solutions. Its offerings include routers, switches, wireless networking equipment, data center infrastructure, security platforms, unified communications tools and software designed to help organizations connect, manage and protect their digital environments.

Cisco serves businesses, government agencies, educational institutions, telecommunications providers and other organizations worldwide.

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