Morgan Stanley cuts Cisco Systems stock target before earnings
Published on 11/09/2026 at 13:07 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWSWhat Investors Watch Before Earnings
- Morgan Stanley lowered Cisco's rating to Equal-weight and reduced its target from 135 US dollars to 120 US dollars.
- Cisco is scheduled to report fiscal first-quarter results after the US market close on November 12.
- Investors will focus on orders, AI infrastructure growth and gross margin as networking demand expands.
Before Cisco Systems' fiscal first-quarter report, Morgan Stanley has lowered its rating and price target, putting the networking company under a higher bar for further gains. In a report published by TheStreet on Friday, November 6, the bank moved Cisco to Equal-weight from Overweight and cut its target to 120 US dollars from 135 US dollars.
TheStreet said Morgan Stanley still sees solid checks on demand, but considers the threshold for a positive surprise higher after Cisco's strong run. The bank's target cut amounts to 11.11 percent and places the shares at parity with the S&P 500 on its forward earnings assessment.
AI Growth Meets Margin Pressure
Cisco ended fiscal 2026 with revenue of 63.3 billion US dollars, up 12 percent year over year, while fourth-quarter revenue rose 18 percent to 17.3 billion US dollars, according to the report. AI infrastructure orders reached 9.3 billion US dollars for the full fiscal year, including 4 billion US dollars in the fourth quarter.
The central investment question is whether AI demand can offset the lower margins associated with hyperscaler business. TheStreet reported that Morgan Stanley expects AI revenue of 9 billion US dollars in fiscal 2027 and 12 billion US dollars in fiscal 2028, above Cisco's 7.5 billion US dollar fiscal 2027 target. The bank also expects Cisco's fiscal 2027 revenue to reach about 73.25 billion US dollars and earnings per share to rise 18 percent to 5.14 US dollars.
Morgan Stanley expects first-quarter revenue of 18.3 billion to 18.4 billion US dollars, a gross margin of 66 percent and adjusted earnings per share of 1.36 to 1.38 US dollars. Cisco's own guidance calls for revenue of 18.0 billion to 18.2 billion US dollars and adjusted earnings per share of 1.32 to 1.34 US dollars.
Thursday Brings the Next Test
Cisco is scheduled to release fiscal first-quarter results after the US market close on Thursday, November 12. The update should show whether strong networking orders are translating into profitable growth and whether management maintains its AI infrastructure targets.
Cisco Systems stock traded at 84.29 euros on Lang & Schwarz at 13:03 Berlin time on Monday, November 9. Investors can follow the real-time quote of Cisco Systems stock.
Broader technology-market sentiment remains relevant for Cisco ahead of the report; investors can follow current S&P 500 market reports.
More news and analysis on Cisco Systems stock is available in the Cisco Systems stock topic.
Cisco Systems at a Glance
- Company: Cisco Systems, Inc.
- ISIN: US17275R1023
- Ticker: CSCO
- Lang & Schwarz quote: 84.29 euros, Monday, November 9, 2026, 13:03 Berlin time
- Next earnings report: Thursday, November 12, 2026, after the US market close
