Analyst: Cisco Stock to Lose Market Dominance

Cisco could lose market shares amid ongoing supply chain issues

Deputy Editor
Apr 12, 2022 at 9:37 AM
facebook twitter linkedin

While the broader tech sector is in rally-mode this morning, the shares of Cisco Systems Inc (NASDAQ:CSCO) are lower ahead of the opening bell, last seen down 0.7% at $52.50. Citi downgraded the tech giant to "sell" from "neutral," while trimming its price target to $45 from $65, citing ongoing supply chain issues and dwindling market share, as competitors such as Juniper Networks (JNPR) and Arista Networks (ANET) ramp up their competitiveness.

Coming into today, brokerages were relatively split on Cisco stock; 10 of 17 analysts consider CSCO a "buy" or better. Meanwhile, the 12-month consensus target price of $63.83 -- a hefty 24.2% premium to last night's close -- signals possible price adjustments on the horizon.

The options pits are skewed toward calls. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Cisco stock's 50-day call/put volume ratio sits at 3.07, indicating calls have outnumbered puts by a more than three-to-one ratio in the last two months.  

When we last covered Cisco stock, we noted the historically bullish 320-day moving average as a trendline to watch. Yesterday, the shares breached this trendline for the first time on a closing basis since January 2021. Year-to-date, CSCO is off by more than 16.5%.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners