Plus: opinions on Disney, Toll Brothers, Tiffany & Co., Yahoo! and Electronic ArtsCisco Systems (CSCO): Reiterates 3 STARS (hold)
Analyst: Ari Bensinger
Cisco posts April-quarter EPS of 31 cents, vs. 24 cents, below our 32 cents estimate, largely reflecting higher stock option expense. Sales increased 21%, above our forecast, and gross margin remained steady at 64%, despite a sales shift toward lower margin consumer products and the emerging markets. In our view, networking continues to evolve from a simple transport medium into an intelligent communication system, which plays directly into Cisco's strength of selling integrated networking products. Based largely on a peer-average p-e multiple, our 12-month target price is $29.
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