Cisco Stock Cools From Highs Ahead of Earnings Report

The stock could be ripe for a fresh round of analyst upgrades

Deputy Editor
Aug 17, 2021 at 2:48 PM
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Cisco Systems Inc (NASDAQ:CSCO) is gearing up to release its fiscal fourth-quarter earnings report, due out after the close tomorrow, Aug. 18. The security is pulling further away from its Aug. 13, two-year peak of $56.62, and is down 0.9% to trade at $55.78 at last check.

The equity has the support of its 20-day moving average, which helped guide it toward its recent highs. Meanwhile, the 60-day moving average sits further below as a potential floor as well, after containing the stock's June pullback. CSCO sports a 24.6% year-to-date lead, and is up 32.5% year-over-year. 

csco chart aug 17

Most analysts covering Cisco Systems stock are optimistic, though there are a few hold outs. Ten call the stock a "buy" or better, while six say "hold." The 12-month consensus price target of $56.44 is a mere 1.3% premium to current levels, indicating CSCO could be ripe for a round of upgrades and/or price-target hikes. 

Short-term options traders have rarely been more call-biased. This is per the security's Schaeffer's put/call open interest ratio (SOIR), which its higher than just 6% of readings from the past 12 months. 

The day after its last eight earnings reports, CSCO was higher a mere three times, averaging a next-day return of 5.9%. This time around, the options pits are pricing in a slightly bigger post-earnings move of 6.2%.

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