Cisco Stock Surges To Top Of Dow After Earnings Beat

Three analysts have issued price-target hikes in response

Managing Editor
Nov 15, 2018 at 9:59 AM
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The shares of Cisco Systems, Inc. (NASDAQ:CSCO) are up 4.7% to trade at $46.42 this morning, alone at the top of the Dow, after the company reported adjusted fiscal first-quarter earnings of 75 cents per share and revenue of $13.07 billion, both exceeding expectations. CEO Chuck Robbins noted Cisco was impacted by the U.S. tariffs on China, but was "optimistic" about a coming resolution.  

In response, three brokerages firms have issued price-target hikes, including to $59 at Cowen. That's territory CSCO hasn't traded at since 2000, and is a 27% increase from its current perch. The shares pulled back from their Oct. 3 18-year high of $49.47 in the wake of the broad market sell-off, but the dip was contained by their 200-day moving average. Overall, the equity boasts a 20% lead year-to-date.

In the options pits, traders were loading up on long puts relative to long calls at a heavier-than-usual clip ahead of earnings. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CSCO stock's 10-day put/call volume ratio of 1.16 ranks in the 94th annual percentile.

Echoing this, the equity's Schaeffer's put/call open interest ratio (SOIR) stands at 1.05, which also arrives in the 94th percentile of its annual range. In other words, speculators are unusually put-biased among options set to expire within three months. Given the solid long-term technical performance from the tech stock, this could be indicative of shareholders protecting paper profits against any downside risk.


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