Cisco stock price target raised to $72 at Evercore ISI

On Thursday, Evercore ISI increased its price target on Cisco Systems Inc. (NASDAQ:CSCO) to $72 from $67, while maintaining an Outperform rating on the stock. With a market capitalization of $244 billion and an overall "FAIR" financial health rating according to InvestingPro, Cisco continues to demonstrate its market strength. Evercore ISI highlighted Cisco’s strong performance in the April quarter, with revenue and earnings per share (EPS) surpassing Wall Street expectations. The company reported $14.15 billion in revenue and $0.96 in EPS, compared to the consensus estimates of $14.0 billion and $0.92, respectively.

The positive earnings surprise was attributed to improved gross margins, approximately 100 basis points above the prior guidance, and one-time tax benefits. With an impressive gross profit margin of 65.2% and a return on equity of 21%, Cisco demonstrates strong operational efficiency. Cisco’s revenue grew by 11%, which included contributions from Splunk Inc . (NASDAQ:SPLK), with significant growth in its core networking segment, which saw an 8% rise due to robust demand across both data center and campus portfolios.

For the July quarter, Cisco has provided guidance of $14.6 billion in revenue and $0.97 in EPS, indicating around a 7% year-over-year sales growth. However, the forecast suggests a slight decline in margins by about 50 basis points quarter-over-quarter due to the full quarter impact of tariffs.

Evercore ISI pointed out several key factors that support their positive outlook on Cisco. Firstly, artificial intelligence (AI) orders reached $600 million, which is approximately double the amount in the January quarter, and Cisco achieved its $1.0 billion target ahead of schedule. The firm anticipates further growth in FY26, not only from Hyperscale but also from sovereign and enterprise tailwinds. Secondly, Cisco has prepared for the worst-case scenario regarding tariffs, which if not realized, could provide an upside to margins. Additionally, Cisco is experiencing increasing tailwinds in security and networking, both in data centers and campuses, which could be beneficial as the company prepares for a campus refresh. Lastly, orders have risen by 9% year-over-year, with U.S. Federal orders up by double digits and total enterprise orders increasing by 22% (6% excluding SPLK).

In conclusion, Evercore ISI reaffirmed its Outperform rating and adjusted the price target to $72 to account for the higher forward-twelve-month EPS. As a prominent player in the Communications Equipment industry, Cisco has maintained dividend payments for 15 consecutive years, with a current dividend yield of 2.7%. Want deeper insights? InvestingPro offers exclusive access to 12+ additional key metrics and analysis tools to help you make informed investment decisions. The firm believes that Cisco is well-positioned to maintain sales growth in FY26, potentially accelerating due to factors such as campus refreshes, AI tailwinds, and sovereign ramps, which could contribute to the stock’s re-rating.

In other recent news, Cisco Systems Inc. reported impressive third-quarter earnings for 2025, surpassing Wall Street expectations with an earnings per share (EPS) of $0.96, higher than the forecasted $0.92. The company also achieved a revenue of $14.1 billion, slightly above the anticipated $14.04 billion, marking an 11% year-over-year increase. Cisco’s recent financial disclosures highlighted strong performance in AI infrastructure, with orders surpassing $1 billion, significantly contributing to the company’s growth. JPMorgan responded to these results by raising its price target for Cisco to $73, citing robust AI orders and maintaining an Overweight rating on the stock. Meanwhile, Raymond James reaffirmed its Market Perform rating following Cisco’s positive earnings report and optimistic financial outlook. In corporate developments, Cisco announced the upcoming retirement of its Chief Financial Officer, with Mark Patterson, a company veteran, set to take over the role. Despite looming tariff uncertainties and an ongoing Section 232 investigation, Cisco remains confident, with management not observing any signs of a deteriorating macroeconomic environment affecting sales. The company continues to focus on advancements in artificial intelligence and strategic partnerships, positioning itself for sustained growth.

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