{"id":42594,"date":"2025-08-16T11:39:26","date_gmt":"2025-08-16T11:39:26","guid":{"rendered":"https:\/\/quickassetsmarket.com\/index.php\/2025\/08\/16\/cisco-shares-drop-over-2-after-hsbc-downgrade-to-hold\/"},"modified":"2025-08-16T11:39:26","modified_gmt":"2025-08-16T11:39:26","slug":"cisco-shares-drop-over-2-after-hsbc-downgrade-to-hold","status":"publish","type":"post","link":"https:\/\/quickassetsmarket.com\/index.php\/2025\/08\/16\/cisco-shares-drop-over-2-after-hsbc-downgrade-to-hold\/","title":{"rendered":"Cisco shares drop over 2% after HSBC downgrade to Hold"},"content":{"rendered":"
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Cisco Systems\u2019 shares fell more than 2% on Friday after HSBC downgraded the networking equipment maker from \u201cbuy\u201d to \u201chold\u201d, citing concerns that the company\u2019s recent restocking boost is losing steam. <\/p>\n

The bank also lowered its price target to $69 per share from $73, implying a modest 0.4% downside from Thursday\u2019s close.<\/p>\n

Cisco shares were trading at $67.27, down 2.93% at the time of writing. <\/p>\n

Fourth-quarter results match consensus but lag HSBC estimates<\/h2>\n

For the fourth quarter of fiscal 2025, Cisco reported revenue of $14.67 billion, up 7.6% from the same period a year earlier. <\/p>\n

The figure matched both consensus and HSBC\u2019s expectations.<\/p>\n

Non-GAAP operating margin rose 1.73 percentage points year-on-year to 34.3%, meeting consensus forecasts but falling short of HSBC\u2019s 35.3% projection. <\/p>\n

Non-GAAP earnings per share increased 13.8% to $0.99, also in line with estimates.<\/p>\n

The networking segment \u2014 a core part of Cisco\u2019s business \u2014 showed marked improvement over the year, but the company\u2019s forward guidance raised questions about whether this recovery can continue at the same pace.<\/p>\n

Restocking effect fading, says HSBC<\/h2>\n

In a note to clients, HSBC analyst Stephen Bersey said Cisco\u2019s \u201crestocking party seems over\u201d following quarterly results that, while broadly in line with market expectations, fell short of the bank\u2019s forecasts.<\/p>\n

\u201cWe expected Cisco\u2019s networking segment to report improved growth vs a low base as its sector emerged from several quarters of destocking,\u201d Bersey wrote. <\/p>\n

He noted that networking revenue growth had rebounded sharply \u2014 from a 23.5% year-on-year decline in the first quarter of fiscal 2025 to a 12.2% increase in the fourth quarter.<\/p>\n

However, Bersey flagged that the company\u2019s fiscal 2026 revenue guidance of 5% year-on-year growth, combined with slowing growth in remaining performance obligations and backlog (up just 4.2% in the fourth quarter), suggests the restocking-driven momentum may be fading sooner than anticipated.<\/p>\n

AI strength offset by weakness elsewhere<\/h2>\n

Cisco has seen rising demand for AI-related infrastructure, with more than $2 billion in orders booked during fiscal 2025. <\/p>\n

However, HSBC noted that this strength appears to be offset by softness in other areas of the business.<\/p>\n

Bersey also argued that the stock now looks fairly valued. <\/p>\n

Cisco shares have climbed over 17% year-to-date and surged 42.8% in the past 12 months, outpacing the broader S&P 500. <\/p>\n

Despite this performance, most analysts remain cautious \u2014 of the 38 covering the stock, 24 rate it as a \u201chold\u201d, according to LSEG data.<\/p>\n

The downgrade from HSBC comes even as Cisco delivered solid year-on-year revenue growth in its latest results, underscoring investor concerns about the sustainability of its growth drivers.<\/p>\n

The share price drop on Thursday suggests some investors are now reassessing the company\u2019s valuation and growth trajectory.<\/p>\n

Cisco\u2019s ability to balance AI infrastructure gains with stability in its broader product portfolio will be a key factor for the stock in the months ahead.<\/p>\n

The post Cisco shares drop over 2% after HSBC downgrade to Hold<\/a> appeared first on Invezz<\/a><\/p>\n

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Cisco Systems\u2019 shares fell more than 2% on Friday after HSBC downgraded the networking equipment maker from \u201cbuy\u201d to \u201chold\u201d, citing concerns that the company\u2019s recent restocking boost is losing steam. The bank also lowered its price target to $69 per share from $73, implying a modest 0.4% downside from Thursday\u2019s close. Cisco shares were <\/p>\n","protected":false},"author":1,"featured_media":42595,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-42594","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"_links":{"self":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/42594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/comments?post=42594"}],"version-history":[{"count":0,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/42594\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media\/42595"}],"wp:attachment":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media?parent=42594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/categories?post=42594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/tags?post=42594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}