Cisco Stock Plummets on Dismal Revenue Forecast

The equity is down over 15% year-over-year

Digital Content Manager
Aug 13, 2020 at 10:40 AM
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The shares of Cisco Systems, Inc. (NASDAQ: CSCO) are down 10.6% at $42.99 this morning, despite the company's better-than-expected fourth-quarter results. The negative price action came after the tech giant's first-quarter revenue forecast came in below Wall Street's estimates, and the company announced a restructuring plan in response to coronavirus that some believe could create tailwinds. As a result, the equity got three price target hikes and three cuts, including a slash to $55 from $60 at Owen and Company.

On the charts, Cisco stock has mostly recovered from its mid-March lows near the $32 level. Shares have been chopping higher since then, with the security's 50-day moving average containing most pullbacks over the last couple of months. However, overhead pressure at the $48 mark is keeping a tight lid on the equity. Today's drop is testing its footing at the aforementioned 50-day, and has the stock eyeing its worst daily percentage drop since 2011. Year-over-year, CSCO is down 15.1%.

Analysts were majorly optimistic toward the equity coming into today, with 13 of the 19 in coverage sporting a "buy" or better rating, and the remaining six carrying a tepid "hold." Meanwhile, the 12-month consensus price target of $49.71 is a 3.5% premium to its current perch.

That bullish analyst sentiment is reflected in the options pits, where calls are doubling puts. In the last 10 days, 101,875 have been exchanged, as opposed to 50,004 puts. 

 


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