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Analyst Estimates: Here's What Brokers Think Of Cisco Systems, Inc. (NASDAQ:CSCO) After Its First-Quarter Report

Simply Wall St
·4 min read

It's been a pretty great week for Cisco Systems, Inc. (NASDAQ:CSCO) shareholders, with its shares surging 10% to US$41.40 in the week since its latest quarterly results. Cisco Systems reported in line with analyst predictions, delivering revenues of US$12b and statutory earnings per share of US$0.51, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Cisco Systems

earnings-and-revenue-growth
earnings-and-revenue-growth

Following last week's earnings report, Cisco Systems' 22 analysts are forecasting 2021 revenues to be US$48.6b, approximately in line with the last 12 months. Statutory per share are forecast to be US$2.44, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$48.3b and earnings per share (EPS) of US$2.49 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$49.14. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Cisco Systems analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$36.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Cisco Systems shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Cisco Systems' growth to accelerate, with the forecast 1.2% growth ranking favourably alongside historical growth of 0.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.3% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Cisco Systems is expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Cisco Systems' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$49.14, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Cisco Systems going out to 2025, and you can see them free on our platform here..

We also provide an overview of the Cisco Systems Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

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But that argument misses the point. Yes, there are short-term pressures facing Exxon Mobil. Those aren’t the only pressures, however. In fact, there’s one core problem for Exxon Mobil: the world has changed. And it’s going to be difficult, if not impossible, for this oil giant to adapt. The Fundamental Case for XOM Stock If you look at the numbers, there’s a case to be made for XOM stock. One number to start with is $40. That’s the current per-barrel price of West Texas Intermediate crude. In 2019, on average, Exxon Mobil realized a price of $56.32 per barrel, according to its Form 10-K filing with the U.S. Securities and Exchange Commission. The year before, it was nearly $63. 7 Long-Term Stocks to Buy with the Election Behind Us The impact on earnings is staggering. Per that filing, a $1 move in the weighted-average realized crude price would increase Exxon’s after-tax profit by $475 million. That’s about 11 cents per share. So if (or when) crude bounces back, so will Exxon earnings … and in a big way. The second number is 9.9. That’s the dividend yield generated by XOM stock at the moment (in percentage points, obviously). Meanwhile, management has committed to the payout. And the two numbers can work together. A rebound in crude prices not only boosts earnings, but it puts the continued speculation about a dividend cut to bed. That means investors keep their income, and XOM stock likely gets a boost as well. In that scenario, Exxon can be a big winner. Beyond the Numbers That argument seems to make sense, but I believe it has a critical flaw. It is based on the idea that XOM stock has sold off because crude prices have plunged this year. And that’s simply not the entire story. After all, Exxon still has a market capitalization around $150 billion. It’s big institutional investors who move the stock — and they’re not selling (or putting off buying) the stock because of the size of the dividend. They’re not selling because oil futures went negative in April, or because WTI crude is at $40 at the moment. If they believed that crude was heading back to $60-plus once normalcy returned, they’d be buying XOM stock with both fists. They’re not doing that. And I’d bet that’s because a lot of those big investors indeed are taking the long view. That view can be summarized with a simple question: Can Exxon Mobil grow over time? And increasingly, the answer seems to be “no.” Electric vehicle adoption clearly is going to rise. We’ve seen stocks ranging from manufacturers to suppliers, in the U.S. and elsewhere, simply take off this year. That in turn suggests lower gasoline demand, which pressures Exxon’s upstream (exploration) and downstream (retail) businesses. Chemical demand probably bounces back to some extent, but there’s a shift away from plastics and other oil derivatives. Even natural gas demand probably goes lower over time thanks to renewable growth. Growth Without Growth There really isn’t any part of Exxon Mobil’s business that is untouched by changing demand trends. Those trends didn’t begin in 2020, and they’re not going to end in 2021. If anything, the changes have been accelerated at least in part by the pandemic. And that’s an enormous problem for XOM stock. It’s not impossible for a stock to grow if demand doesn’t; investors call those cases “melting ice cubes.” But there haven’t been too many successful melting ice cubes in recent years. And I’d wager there’s never been a melting ice cube with a market capitalization of $150 billion. Once a business peaks, the stock is going to run into trouble. And so from here, the 2020 trading in XOM stock looks like a realization by the market that the business indeed has peaked. That view suggests that XOM stock has fallen not because investors are distracted by shiny growth stocks, but because they’re correctly focused on a very difficult and dangerous path ahead. On the date of publication, neither Matt McCall nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in the article. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets The post The Future for Exxon Mobil Stock Is Just As Bleak As It Looks appeared first on InvestorPlace.

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  • Can Nio's Q3 Earnings Reignite The Rally Cut Short By Citron's Warning?

    Nio Inc's (NYSE: NIO) scintillating rally came to a screeching halt Friday after short seller Citron Research spoiled the party by suggesting the EV maker's astronomical valuation becomes unjustifiable.Nio's Rally and The Hard Fall: Nio's stock, which ended 2019 at $4.02, began to turn the corner along with the post-COVID recovery in deliveries. The rally picked up steam amid the company's conscientious efforts to innovate, cut the flab and work further on its service-focused approach.Ahead of Friday's session, the stock was up about 1,100% compared to Tesla Inc's (NASDAQ: TSLA) 392% advance.Nio started Friday's session on a strong note, thanks to strong quarterly results reported by domestic peer Li Auto Inc. (NASDAQ: LI), and went on to hit a high of $54.20. It took just six sessions for the stock to move from $40 to $50.However, shares came under heavy selling pressure following Citron's report in which the firm gave Nio's stock a $25 price target. After being down about 16% at one point in the session, the stock has cut its losses to some extent to close down 7.7% at $44.56.Related Link: Nio, Li Auto Make Big Moves Following Xpeng's Q3 ResultsIs There Merit To Citron's Argument? Citron harped on Nio losing out on market share due to Tesla pricing, especially the "Made In China" Model Y, competitively. The U.S. EV giant's price cuts undoubtedly can hurt.However, Nio has carved a niche for itself with its technological prowess and service-focused approach to lure customers.After unveiling a 100-kilowatt-hour battery recently, the company is reportedly working on 150 kWh battery, which can nearly double the range of its EVs. According to reports, the company is also working on developing in-house chips for its ADAS system.The company has managed to up its mindshare among consumers."Compelling evidence exists that consumers are increasingly perceiving Nio as a 'high-quality premium brand' with best-in-class technology and service," Deutsche Bank analyst Edison Yu said in a late September note.The company has made its cars affordable by introducing the Battery-as-a-Service scheme, which trims a significant amount from the list price.Nio is also eyeing global expansion and is reportedly building a separate team to work on the roadmap for exporting vehicles to Europe.Can Earnings Salvage The Stock? Nio is scheduled to report its fiscal-year third-quarter results next Tuesday before the market open. Analysts, on average, estimate a loss of 17 cents per share on revenues of $652.77 million.This represents a marked improvement from the loss of $2.38 per share and revenues of $262.47 million reported for the year-ago quarter.Nio's third-quarter deliveries jumped over 150% year-over-year to 12,206, marking a quarterly record. The strong momentum continued into October, with the company reporting a 100% increase in deliveries to a record of 5,055 units for the month.Valuation Stretched? The run-up seen since the second quarter has rendered Nio's valuation unattractive and unsustainable. For that matter, most EV stocks are showing frothiness and are in bubble territory.That said, Nio has shown discipline and proactiveness in improving its fundamentals and is operating in the sweet spot of a booming Chinese EV market.Fundamental performance in the months ahead will serve as a key to the stock's trajectory.See more from Benzinga * Click here for options trades from Benzinga * Nio, Li Auto Make Big Moves Following Xpeng's Q3 Results * Nio Unveils 100-kWh Battery, Upgrade Plans: What Investors Should Know(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • 3 Big Dividend Stocks Yielding at Least 10%; Analysts Say ‘Buy’

    Markets continued their upward trend this week, gaining ground since the November 3 vote. There is an optimistic view that politics will settle into a more normal pattern with a new Administration. Even so, investors have been wary this past autumn – as there is plenty to be wary about. The coronavirus has started a comeback with the advent of cooler weather, and the political uncertainty that surrounded the election has left the status of further economic stimulus packages in limbo.It’s times like these that investors start taking a renewed interest in dividend stocks. These are the classic defensive stocks, and for good reason: a reliable dividend keeps the income flowing, no matter what the markets do. Wall Street analysts have chimed in – and they are recommending high-yield dividend stocks for investors looking to find protection for their portfolio. Here, we’ll take a look at three stocks that fit a profile: a Strong Buy rating from the analyst community, and a dividend yield that gives at least 10%.Stellus Capital (SCM)Stellus Capital offers capital solutions (read: debt financing) for companies in the lower mid-market range. These are companies that may have difficulty accessing capital through large banks; Stellus shoulders the higher risk as an investment opportunity. The capital company’s portfolio includes 67 companies, $1.6 billion in assets under management, and over $6 billion in total funds invested.Stellus has been raising its dividend payment this year. The next dividend has already been declared for December, and shows an effective increase to 31 cents per common share. This comes from combining the regular 25 cent payment with a special 6-cent dividend, and after the company paid out 25 cents per share in the previous two quarters. Counting the regular dividend, the payment annualizes to $1 per common share, and gives a yield of 10.91%.Writing from Raymond James, analyst Robert Dodd says, “Core earnings covered the base dividend in 3Q20, and a strong spillover position should cushion the dividend in 2021. We continue to view the risk /reward attractively."The analyst added, "The SCM pipeline looks robust, with ~10 portfolio companies going through various stages of due diligence. Repayments in 4Q20 could be as high as $30M - with a modest positive impact to NAV from exits above fair value marks at 3Q20.”To this end, Dodd rates SCM shares an Outperform (i.e. Buy) along with a $11 price target. This figure implies a 17% upside from current levels. (To watch Dodd’s track record, click here)Overall, Stellus’ Strong Buy analyst consensus rating is based on 4 reviews, including 3 Buys and 1 Hold. The stock is selling for $9.43 and its average price target of $10.17 suggests it has a one-year upside potential of ~8%. (See SCM stock analysis on TipRanks)WhiteHorse Finance (WHF)Next up is WhiteHorse Finance, another BDC. WhiteHorse’s focus is on small-cap companies, valued at $50 million to $350 million, and WHF’s investments are typically in the $10 million to $50 million range. WhiteHorse’s portfolio totals more than $595 million.A better outlook for the future, based on earnings recovery, has given a firm foundation to dividend payments, and WhiteHorse has kept up its 35.5 cents regular dividend. Combined with a 12.5 cent special dividend, this makes the most recent payment 48 cents per common share. The yield is a sky-high 12.29%.Oppenheimer analyst Chris Kotowski is upbeat about WhiteHorse, noting “WHF reported 3Q20 core net investment income (NII) of $0.38/share versus our $0.32 estimate and consensus' $0.29E. The bottom line was boosted by an interest recovery, but what encouraged us most was both growth and improvement in asset quality. $58.3M of funding activity was only partially offset by only $26.5M of repayments, driving ~8.8% linked-quarter growth in investments alongside mark appreciation."The 5-star analyst added, "Management seemed optimistic about the outlook for loan growth, saying that it was perhaps the best environment they had seen since 2012–2013, and they clearly have the capacity to put capital to work. The current gross leverage of 0.94x (and net 0.87x) sits below management's 1.00–1.25x target leverage, leaving ample room for growth in coming quarters amidst a strong investment pipeline."As a result, Kotowski gives the stock an Outperform (i.e. Buy) rating, and his $15 price target implies a robust 29% upside for the year ahead. (To watch Kotowski’s track record, click here)Overall, WhiteHorse has a unanimous Strong Buy analyst consensus rating, with 3 buy-side reviews on record. The stock is currently priced at $11.65 and its $13.25 average price target suggests it has a one-year upside of 14%. (See WHF stock analysis on TipRanks)Capital Southwest Corporation (CSWC)Last but not least is Capital Southwest, another Texas-based company in the business development sector. CSWC focuses on lending and credit options for mid-market companies. Capital Southwest boasts a portfolio featuring $664 million invested into 69 companies, and has over $150 million in liquidity available.Revenues have been recovering since going negative in Q1, at the height of the corona crisis. Sequential gains in both Q1 and Q2 have brought quarterly revenues to $21 million, while earnings in Q3 showed a strong spike to 45 cents per share, the highest value in over two years.Rising earnings have allowed Capital Southwest to keep up its history of reliable dividend payments. The company raised its dividend going into 2020, and has maintained the 51-cent payment all year. The 10.5% yield is more than 4x higher than the average found among financial sector peer companies, bringing CSWC to the attention of dividend investors.Among CSWC's fans is JMP analyst Devin Ryan, who rates the stock a Buy and gives it a $17 price target. (To watch Ryan's track record, click here)"Overall, we think results for the quarter were strong and that Capital Southwest is one of the most attractive ways to gain exposure to lower-middle-market direct originations. We highlight improving credit quality, strong portfolio growth, a solid pipeline of deal flow, sustainable core/supplemental dividends and management’s focus on expenses as reasons we think the stock is positioned to outperform," Ryan opined.All in all, CSWC has a Strong Buy rating from the analyst consensus, with 3 recent Buy reviews and 1 Hold. Shares have an average price target of $15.67, which is almost flat compared to the current trading price. The real return here is in the dividend. (See CSWC stock analysis at TipRanks)

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