Cisco falls after FBR cuts rating to Underperform

theflyonthewall.com

Cisco (CSCO) is sinking after FBR Capital analyst Scott Thompson downgraded his rating on the stock to Underperform from Market Perform in a note to investors earlier today. Cisco is likely to be hurt by reduced demand for routers and switches, as Ethernet networks and compute platforms replace some of those devices, Thompson predicted. The number of switching and routing ports at service providers should drop more than 40% over the next 18-36 months, according to the analyst. Meanwhile, new networking technologies may significantly reduce demand for networking components offered by Cisco, added the analyst, who recommended that investors take profits in Cisco. He lowered his price target on the shares to $17 from $22. For similar reasons, Thompson also lowered his rating on Cisco competitor Juniper Networks (JNPR) to Underperform from Market Perform. He reduced his target on that stock to $15 from $18. In mid-morning trading, Cisco fell 78c, or 3.6%, to $20.90, while Juniper slid 2.7% to $18.80.

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