Cisco Systems shares climb 6%; analysts praise outlook, supply chain execution
Justin Sullivan

Cisco Systems (NASDAQ:CSCO) shares climbed more than 6% Thursday after the networking giant reported fiscal fourth-quarter results that topped expectations and issued strong guidance that led to praise from Wall Street.
Morgan Stanley analyst Meta Marshall, who has a neutral rating on Cisco (CSCO), but raised his price target to $48 a share from $46 following the results, noted that the sales outlook for growth of 2% to 4% is "materially" above consensus, but the earnings guidance was only inline.
Marshall said that some of Cisco's (CSCO) ongoing strength came from customers wanting to get their orders in before the company implemented a price increase during the quarter. Marshall said that while supply chains "remain tight", Cisco's (CSCO) outlook "does speak to the criticality of the network."
Marshall added there is some impact from "catch-up spend" as companies continue to modernize the technology, but if these modernization projects were to continue even with the economy cooling, it's likely Cisco (CSCO) would continue to benefit and Morgan Stanley would become more positive on the company. 
Citi analyst Jim Suva, who has a sell rating on Cisco (CSCO), but raised his price target to $44 a share from $40, noted that the sales outlook of 2% to 4% growth is "materially" above consensus of a decline of 0.6%, but earnings per share guidance for 2023 was inline, leaving the analyst to note there was something for both bulls and bears.
Suva noted that the results were likely good for Jabil Circuit (JBL), as it builds for both Cisco (CSCO) and Arista Networks (ANET).
Cisco (CSCO) said it expects revenue for its 2023 fiscal year to be up between 4% and 6% from 2022, compared to expectations of 3.3%. The company also said it expects earnings excluding one-time items, to be between $3.49 and $3.56 per share.
Speaking on a conference call to discuss Cisco's (CSCO) results, Chief Executive Chuck Robbins said that he expects the company to see "strong performance across our [technology] portfolio," and that the supply chain constraints that affected Cisco's (CSCO) business earlier this year "began to ease slightly at the back half of the [fourth] quarter," and that demand signals remain solid.
Raymond James analyst Simon Leopold has an outperform rating on Cisco (CSCO), but lowered the firm's price target to $59 from $63, noting that the company "defied bearish sentiment" even if its supply chain is still somewhat constrained, as product orders declined 6% year-over-year.
"Investors have worried about order metrics, but we assert that with supply chain constraints and duration changes investors should focus on order levels, not [year-over-year] growth," Leopold wrote. "Ciscoâs metrics indicate that demand remains healthy and its outlook faces supply chain constraints."
Cisco (CSCO) recently disclosed it was hacked by an unknown entity in May, but added with "moderate to high confidence" that the attack came from a group with links to the UNC2447, Lapsus$ and Yanluowang ransomware operators.