Cisco Systems Trading forecasts and signals

Cisco Systems Inc reported better than quarterly revenue forecasts, as the recovery from a new wave of COVID-19 in China eased the load on the supply chain and helped the company meet demand for network equipment.Cisco, which sells routers, switches and communications tools such as WebEx, has seen a surge in orders as businesses revive plans to upgrade their infrastructure after a pause caused by the pandemic. The issuer also benefited from supply chain disruptions after a key manufacturing hub in China lifted strict COVID-19 restrictions imposed since March.For the fourth financial quarter, the company's revenue amounted to $13.1 billion compared to the $12.73 billion expected by analysts. Net income fell to $2.8 billion, or 68 cents per share, from $3 billion, or 71 cents per share, a year ago.Cisco shares on NASDAQ on August 17 fell by 0.24% to $46.66, and on the postmarket rose by 4.41% to $48.72 per ...

The market the day before. The session on May 19, the main American stock exchanges ended in the red zone. The S&P 500 dropped 0.75% to 4,901 points, the Dow Jones fell by the same amount, and the Nasdaq lost 0.26%. Of the 11 members of the S&P 500, eight closed in negative territory. Representatives of non-cyclical consumer goods (-1.98%) and high-tech companies (-1.07%) traded worse than the market.Company newsCisco Systems (CSCO: -13.7%) reported a decrease in revenue in the third fiscal quarter and a slowdown in the growth of the number of orders. The company noted supply chain problems due to quarantine in China.Patrick Frisk will step down as CEO and Board Member of Under Armour (UAA: -11.9%) on June 1. Colin Brown will be appointed Interim Executive Director.Harley-Davidson (HOG: -9.3%) suspends assembly and delivery of its products for two weeks due to problems with components from an unnamed supplier.We expectInflation in Japan in April, according to consensus, was 2.5%, exceeding 2% for the first time in 13 years. In the UK, the indicator reached a 40-maximum at 9%. The German producer price index rose by 33.5% YoY. The main reason for such a sharp increase was the rise in the cost of energy carriers and failures in their supply. The average price of oil since the beginning of the year was $100 per barrel against $63 in January-May 2021 (+60%). Coal prices rose from last year's $70 per ton to $262.Yields on two- and 10-year treasuries fell by 3 bps and 1 bps - to 2.61% and 2.85%, respectively. The indicator for 30-year securities decreased by 1 bps, to 3.07%.Trading on May 19 on the sites of Southeast Asia ended in the red. China's CSI 300 fell by 0.15%, Hong Kong's Hang Seng adjusted by 1.89%, Japan's Nikkei 225 lost 0.58%. EuroStoxx 50 has been growing by 1.30% since the opening of the session.Brent crude futures are quoted at $103.9 per barrel. Gold is trading at $1,861 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3850-3900 points.MacrostatisticsThe number of unemployed in the United States in April increased by 218 thousand against the March growth of 197 thousand and with a consensus of 200 thousand.No important macro data is scheduled to be published today.Sentiment IndexThe sentiment index dropped to 33.Technical pictureThe S&P 500 is moving in a downtrend that began in early April. To date, the broad market index has lost more than 600 points. The continuation of the correction looks more likely than a rebound above 4000 points. The RSI indicator tends to the lower border of the channel, the MACD does not give additional signals.Quarterly reportsReporting on the results of the second quarter of the fiscal year this Friday will be presented by Deere & Co. (DE). The share of agricultural machinery in the company's revenue is 65%, the share of construction machinery is 26%, the share of leasing is 9%. Over the past five years, the revenue and EPS CAGR amounted to 10.5% and 31.6%, respectively. In the last two years, Deere's earnings per share have come out above expectations. High growth rates and strong financial results led to the fact that the company's shares rose from $120 in March 2020 to $430 in the same month of 2022. The transformation of the agro-industrial sector will further improve Deere's financial performance. Rising prices for grain crops stimulate an increase in their production worldwide. The food shortage, which was provoked by the conflict in Ukraine, will require new tools to optimize the ...

The market the day beforeOn May 18, US stock exchanges ended in negative territory. The S&P 500 dropped by 4.04% to 3,924 points, the Nasdaq lost 4.73%, the Dow Jones adjusted by 3.57%. All sectors included in the broad market index closed in the red. Discretionary (-6.60%) and non-cyclical consumer goods (-6.38%) showed the largest drop. Utility providers experienced less pressure (-1.03%).Company newsChevron (CVX: -2.64%) is launching a carbon capture and storage project to reduce the carbon intensity of mining in California.Cisco (CSCO: -4.43%) reported revenue worse than expected and demonstrated a slowdown in sales growth under the influence of the unfavorable geopolitical situation and anti-covid restrictions in China. Management revised the forecast of revenue increase from 4.5% to 2-3%.Target Corp. (TGT: -24.93%) generated revenue above consensus for the quarter, but the retailer's profit halved due to high fuel and freight costs. The management confirmed the sales forecast for the current fiscal year, but lowered the operating profit target.We expectOn the eve of the Dow Jones and S&P 500 showed the deepest drop since June 2020. The market dynamics was determined mainly by the collapse of the shares of the largest retail chains Walmart (WMT) and Target Corp. (TGT). The quarterly reports of both retailers reflect the pressure on profitability of increased logistics costs and labor costs in conditions of high inflation. At the same time, the dynamics of sales volumes signals the sustainability of consumer spending. According to the US Department of Commerce, retail sales increased by 0.9% mom in April, without adjusting for inflation at 0.3% mom, which indicates a steady real pace. Sales of the control group of products excluding volatile components increased by 1.0% mom, exceeding expectations. At the same time, the estimate of total sales growth for March was increased from 0.5% to 1.4% mom. At the same time, due to price pressure, the structure of household spending is gradually being transformed. Preference is increasingly being given not to the purchase of durable goods and discretionary categories that provide higher margins for retailers, but products for everyday consumption. In addition, on the eve of the holiday season, there is a tendency to increase the demand for services, in particular in the field of recreation and entertainment.According to FactSet, as a result of the recent sell-off, the S&P 500 is trading with a forward multiplier of "price to earnings" (P/E) of 16.6, and this is the minimum after the 2020 correction caused by the pandemic factor.The stock exchanges of the Asia-Pacific region ended trading on May 19 mostly in the red. Japan's Nikkei adjusted by 1.89%, Hong Kong's Hang Seng dropped by 2.54%, China's CSI 300 added 0.19%. EuroStoxx 50 has been losing 2.37% since the opening of the main session.The price of Brent crude oil futures dropped to $107.7 per barrel. Gold is trading at $1,824 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3870-3930 points.MacrostatisticsToday, data on sales in the secondary real estate market in the United States for April will be presented (forecast: 5.6 million vs. 5.77 million in March). The Philadelphia Federal Reserve's manufacturing activity index for May will also be published (forecast: 17.0 points after 17.6 in April).Sentiment IndexThe sentiment index dropped 4 points to 32.Technical pictureThe S&P 500 was unable to continue the rebound, and its growth over the past five trading sessions was leveled the day before. The RSI is still close to the oversold zone, the MACD indicates another strengthening of the bears' positions. If the broad market index manages to stay above the support at the level of 3860 points, a "double bottom" pattern may form on the chart, which will create conditions for the resumption of local ...

The market the day beforeTrading on February 14 on US stock exchanges ended mainly with a decline. The S&P 500 dropped 0.38% to 4,402 points, the Dow Jones lost 0.49%, and the Nasdaq showed near-zero dynamics. Only the sectors of cyclical consumer goods (+0.58%) and communications (+0.33%) traded in a moderate plus. The leaders of the fall were the energy sector (-2.24%), finance (-1.11%), healthcare (-1.09%) and real estate (-1.02%).Company newsAccording to the WSJ, Cisco (CSCO: -0.77%) has made an offer to the software manufacturer Splunk (SPLK: +9.1%) to purchase for more than $20 billion, the parties are not actively negotiating this transaction at the moment.In the fourth quarter of 2021, George Soros acquired 20 million shares (approximately 2%) of Rivian (RIVN: +6.5%).Lockheed Martin (LMT: -2.44%) abandoned the idea of taking over Aerojet Rocketdyne (AJRD: -5.6%) after filing a lawsuit by the Federal Trade Commission for a preliminary injunction against this transaction.ExpectationsOne of the significant factors for the markets, along with the expected change in the course of the Fed's monetary policy, remains the situation around Ukraine.As CNBC reports, citing an unnamed American official, Russia has moved part of the long-range artillery and rocket launchers to firing positions threatening Ukraine. The United States believes that Russia will invade the territory of a neighboring state on February 16. President Biden's talks with Putin over the weekend ended to no avail. German Chancellor Olaf Scholz and Ukrainian President Volodymyr Zelensky estimate the probability of Ukraine joining NATO in the foreseeable future as low. Negotiations between the German Chancellor and the head of Russia are scheduled for February 16.The stock exchanges of the Asia-Pacific region completed trading on February 15 in different directions. China's CSI 300 gained 1.06%, Hong Kong's Hang Seng lost 0.82%, Japan's Nikkei declined 0.79%. EuroStoxx 50 has been rising 0.45% since opening.The yield of treasuries rose to 1.99%. Brent crude futures are trading at $95 per barrel. The price of gold is $1,870 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 4350-4450 points.MacrostatisticsProducer price index data will be published today. It is assumed that the overall index rose by 0.5% in January against an increase of 0.2% a month earlier. The consensus forecast for the growth of the index excluding food and fuel producers in January is 0.5% against the same value a month earlier.Sentiment IndexThe sentiment index fell to 43 points amid concerns about the upcoming tightening of monetary policy, as well as the foreign policy situation.Technical pictureA "double top" reversal pattern has formed on the S&P 500 chart. The index dropped below the 200-day moving average on February 11. In the short term, its quotes may adjust to the nearest support located at the local minimum of 4290 points.In sightViacomCBS (VIAC) will present reports for the fourth quarter of 2021 today. The consensus assumes an increase in revenue by 9%, to 7.5 billion, with a decrease in adjusted EPS from $1.04 to $0.43 due to rising costs. We rate the upcoming release as neutral.Also this Tuesday, the quarterly reports of the Marriott International, Inc. (MAR) hotel chain will be released. We are counting on the company's strong results: the consensus forecast assumes revenue growth of 85% QoQ, to $4.014 billion. It is also expected that after last year's loss of $164 million, the company will generate $334 million in net profit. The forecast puts the occupancy rate of hotel rooms at 57.3%, which is 22.4 percentage points higher than last year's ...

Cisco's revenue for April-June increased by 8% to $13.1 billion, which exceeded market expectations by 0.7% and the median forecast of management by 1%. Diluted non-GAAP EPS increased by 5%, 1.4% exceeding the consensus forecast of analysts. Acacia Communications provided a 2% increase in sales.CEO of the company Chuck Robbins noted the strong demand from all client subgroups, as well as the acceleration of sales dynamics to communication providers. In addition, for the first time in recent quarters, the demand for Cisco solutions from corporations has increased.The infrastructure segment became the absolute leader in terms of growth rates, demonstrating an increase in sales by 13% yoy due to the implementation of the deferred demand effect, as well as the increased need of companies for network infrastructure due to the hybrid nature of the work of employees. Chuck Robbins noted the positive dynamics of demand for a wide range of solutions, including routers (Cisco 8000), switches (CAT 9K, Nexus 9000), wireless solutions and fiber. Among the drivers of segment growth, the head of the company noted the demand for Cisco Plus (NaaS solution). At the same time, the CEO pointed to the continuing shortage of components, which limits the volume of deliveries.The application software segment lost 1% against the background of weak indicators of the direction of collaboration solutions, while the CFO of Cisco noted an increase in demand for WebEx (+9%), software for IoT, AppDynamics and software for DC. The cybersecurity segment also showed significantly weaker dynamics compared to our expectations: revenue growth was only 1% yoy, which turned out to be the weakest indicator since 2013, when the segment's quarterly sales also declined. At the same time, Cisco's CFO pointed out that there is a steady demand for the company's cloud solutions.Cisco recorded double-digit growth in orders for all categories of consumers and geographical regions, and in the product segment this figure was 31% (the largest increase in a decade). The amount of obligations to be fulfilled increased by 9% yoy, in the product segment-by 18%.Non-GAAP operating margin exceeded management's expectations, amounting to 33.5% (+0.5 p. p. yoy) on the back of strong sales dynamics in the infrastructure segment.According to the management's forecast, revenue in the next quarter will grow by 7.5-9.5%, non-GAAP EPS - by 5.2%, non-GAAP operating margin will reach 32%. According to the results of the next fiscal year, sales growth is expected at the level of 5-7%, non-GAAP EPS - by 5-7. 1%.We evaluate Cisco's reporting neutrally-negatively. On the one hand, the issuer demonstrated strong sales growth, the management gave a confident forecast for the next fiscal year. However, part of the growth is of an inorganic nature, and the explanations for the sharp slowdown in the expansion of the application software and cybersecurity segments against the background of the growth of competitors seem unconvincing to us. We expect the dynamics of sub-segments to recover in the medium term, but we are revising the forecast for this indicator downwards. At the same time, we consider the pressure on margins against the background of problems in the supply chain to be a temporary phenomenon.We raise the target price for Cisco shares to $57.2 per ...

Cisco quotes continue to move within the correction and formation of the ”Wedge" reversal model. Moving averages indicate the presence of a short-term bullish trend for CSCO. Prices broke through the area between the signal lines down, which indicates pressure from sellers of securities. At the time of publication of the forecast, the price of Cisco shares is 53.28. As part of the forecast, we should expect an attempt to develop a price rise and a test of the resistance level near the area of 55.45. Then, a rebound and a continuation of the fall in the value of securities. The potential target of such a movement is the area below the level of 45.05.An additional signal in favor of a drop in Cisco quotes will be a test of the resistance line on the relative strength indicator (RSI), as we can see, tests of this line have already indicated a drop in stocks several times. The second signal will be a rebound from the upper border of the ”Wedge" reversal model. The cancellation of the option of falling quotations of the Cisco company's share price will be a strong growth and a breakdown of the 58.35 level. This will indicate a breakdown of the resistance area and the continuation of the rise to the area at the level of 70.00. We should expect an acceleration in the fall of stocks with a breakdown of the support area and a close below the level of 51.00, which will indicate a breakdown of the lower limit of the bullish channel.Cisco shares forecast for July and August 2021Thus, the Cisco stock forecast for July and August 2021 suggests the development of a correction and a test of the resistance area near the level of 55.45. From where we should expect a rebound and an attempt to continue the pair's fall to the area below the level of 45.05. A trend line test on the relative strength indicator will be in favor of the fall of the currency pair. The cancellation of the CSCO reduction option will be a strong growth and a breakdown of the 58.35 level. This will indicate a breakdown of the resistance and the continuation of the rise in the value to the area above the level of 70.00. As you can see, the technical analysis of Cisco shares indicates the probability of a fall in the framework of testing the ”Wedge” ...