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Why Cisco Systems conquered the market on Tuesday

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Why Cisco Systems conquered the market on Tuesday

One of the more up and down tech stocks this year, Cisco systems (NASDAQ: CSCO), had a very pleasant up trading session on Tuesday. The networking equipment company’s stock price climbed nearly 4% higher after an analyst’s target price increase. That was a solid gain compared to the S&P500 index, which only managed to rise 0.1% that day.

A small bump thanks to Splunk

German BankMatthew Niknam was the person behind the elevator. Before the market opened, he added $1 per share to his Cisco price target, for a new total of $52. That caution reflects his overall view on the stock, as he maintained his hold rating on it.

In a research note, Niknam wrote that the adjustment was due to changes in his estimates for the company, although it was not immediately clear which estimates, and to what extent he changed them.

This in turn followed the recent completion of the Cisco acquisition cybersecurity company Splunk. While that deal wasn’t cheap, it was a cash transaction that was roughly valued $28 billion — it has significantly strengthened Cisco’s presence in the in-demand cybersecurity segment.

The most recent guidelines were not impressive

Cisco has been a stock rollercoaster, especially since the release of its second-quarter earnings report, in which the company noticeably fell short of both current-quarter and full-year expectations (although, to be fair, outperformed lagging quarterly revenue and profitability). Assuming it integrates Splunk effectively, the big new asset should help the former networking titan post encouraging numbers.

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Erik Volkman has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Cisco Systems. The Motley Fool has one disclosure policy.

Why Cisco Systems conquered the market on Tuesday was originally published by The Motley Fool