Cisco Systems ( CSCO ) climbed Friday as Bank of America/Merrill Lynch upgraded the computer networking giant on views that its shift to software and services will pick up in 2018.
[ibd-display-video id=3065587b width=50 float=left autostart=true] Analyst Tal Liani upgraded Dow component Cisco to buy from neutral and raised his price target to 46 from 37. Liani also upgraded F5 Networks ( FFIV ) to buy from neutral.
Cisco rose 1.4% to close at 39.53, its highest level since early 2001. F5 Networks edged down 0.7% to 136.18.
Cisco has stepped up acquisitions to speed up its shift to software and services from its core business of selling network switches and routers.
Liani also noted Cisco’s cash balance. Cisco has about $84 billion in cash, with $70 billion overseas. U.S. companies will be able to bring back cash held overseas at a lower tax rate as part of the Trump tax package.
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Cisco has forecast revenue growth in the December quarter amid strong demand for a new line of switches. Cisco’s sales have dropped for seven consecutive quarters.
BMO Capital Markets on Wednesday also upgraded F5 Networks to buy, with a price target of 156, up from 122. BMO Capital expects upside from F5 Network’s software business.
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