Jan 3 Investment bank JPMorgan upgraded
its recommendation for Cisco Systems (CSCO.O) to "overweight"
and raised its price target for the network equipment maker on
expectations of a rebound in public sector spending and improved
margins in 2012.
Cisco stock was up 3.4 percent to $18.65 in midday trading
in New York on Tuesday.
"Our proprietary analysis of 30 U.S. federal agency budgets
implies that spending will increase in FY’12 after being down in
FY’11 and may act as a tailwind for Cisco," JPMorgan analyst Rod
Hall said in a note.
"As a result, we believe Cisco represents a relatively safe
haven for communications equipment investors," Hall added.
JPMorgan raised its price target for Cisco shares to $21
The problems Cisco encountered in 2011 were a number of
small issues that resulted in a year-on-year decline in gross
margins, Hall said, adding that it was not likely to happen this
year because those problems have been addressed by the company.
(Reporting By Nicola Leske; editing by John Wallace)
((Nicola.Leske@thomsonreuters.com)(+1 646 223 6134)(Reuters
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