JPMorgan upgrades Cisco to Overweight on early demand recovery

JPMorgan upgraded Cisco (CSCO) to Overweight from Neutral with a price target of $66, up from $55. The firm sees “further headroom for upside in the medium term” despite the recent rally in the shares. It sees earnings upgrades for Cisco from the recovery cycle in enterprise networking demand, which JPMorgan says is still in the early stages as evidence from recent earnings reports of peer companies. The stock offers “modest room for upside” to the valuation multiple, particularly during a period with ramping demand momentum, the analyst tells investors in a research note. JPMorgan is mindful that Cisco’s quarterly results “can be choppy in the early stages of a recovery” and is more focused on the opportunity for medium-term upsides from the evidence of the cyclical recovery in enterprise networking.