Markets & Finance

Needham Downgrades Cisco to 'Buy'


Needham downgraded Cisco (CSCO) to buy from strong buy.

Analyst Tad LaFountain says he believes Cisco is poised to embark on the third phase of its impressive corporate development as a leading vendor of packet-based networking equipment to large-scale telecommunication services providers. He says this shift, following the company's leading roles in routing for enterprise and Internet Protocal routing for the Internet, could take the company's revenue stream to greater than $50 billion over the next five years.

However, he notes the stock has increased 40% since the upgrade to strong buy. This, plus the lack of EPS support from the current business, radically alters Cisco's risk/reward profile. LaFountain has a $17 target.


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