Robertson Stephens cut its investment rating on Cisco Systems (CSCO) to market perform from long-term attractive.
Analyst Paul Johnson says although the lowered stock price may be seductive to
investors, he thinks there's still a near-term downside to stock. He says
it's clearer than ever that the current Cisco is merely a shadow of its former self.
He says Cisco's cost cutting efforts may be an attempt to mitigate the
potential decrease in net operating profit (after tax) that may result
from negative revenue growth.
Nevertheless, Johnson thinks Cisco's competitive
stance and economic outlook have clearly changed. He cut the $0.64 fiscal 2001 (July) EPS estimate to $0.59, and cut the $0.75 fiscal 2002 estimate to $0.55.