Cisco sales poised to falter; Newell devoid of catalysts: 5 big analyst cuts
Investing.com — Here is your Pro Recap of the biggest analyst cuts you may have missed today: downgrades at Cisco, Newell, Datadog, CubeSmart , and Olin.
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Raymond James downgraded Cisco Systems (NASDAQ:CSCO) to Market Perform from Outperform, anticipating the company to suffer college-campus sales declines, which the analysts believe will likely account for around one-third of the expected top-line decline in 2024.
The analysts also wrote that the company's pending $28 billion acquisition of Splunk (NASDAQ:SPLK) looks strategically sound, as it complements XDR, but that it limits Cisco's options and lacks differentiation in the face of mounting competitive pressures.
Despite these challenges, the analysts argue that the share valuation remains attractive, with a forward P/E ratio lower than that of the S&P 500 and EV/EBITDA ratio below the five-year median.
They also wrote that preliminary checks suggest the October quarter will meet expectations, although they added that there is some risk to the outlook, writing:
«We expect Cisco does well in its October quarter. Cisco’s backlog has come down. We imagine Cisco could forecast a worse than seasonal sales decline in its January quarter while customers absorb prior purchases and the macro remains weak.»
Shares were ticking down fractionally to $51.35 in premarket trading.
JPMorgan and Truist both downgraded Newell Brands (NASDAQ:NWL) Monday morning, as reported in real time on InvestingPro.
The consumer-goods purveyor — whose portfolio includes Rubbermaid, Sharpie, and Graco (NYSE:GGG) — slashed its full-year sales outlook on Friday, prompting JPMorgan to lower the stock to Neutral from
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