Braun Stacey Boosts Cisco Stake 7.5% to $23.35M; Price Targets Upped to $95, $91
Braun Stacey Associates increased its stake in Cisco Systems by 7.5% to 341,208 shares worth $23.35 million in Q3. Bank of America and Morgan Stanley lifted Cisco Systems price targets to $95 and $91 following the networking provider’s strong Q1 guidance.
1. Security Revenue Pressure and Cloud Transition
Cisco’s security business saw a 2% year-over-year decline in the most recent quarter, driven by reduced spending on legacy appliances as customers accelerate shifts toward cloud-native defenses. On-premise firewall and VPN hardware revenues fell by mid‐single digits, while subscriptions for next-generation secure access service edge (SASE) and zero-trust offerings grew 15%, signaling early traction but not yet offsetting the hardware downturn. Management attributed the softness to elongated customer procurement cycles and increased competition from hyperscale cloud providers offering bundled security services.
2. Institutional Investors Increase Stakes
In the third quarter, Braun Stacey Associates boosted its position in Cisco by 7.5%, acquiring an additional 23,800 shares to bring its total holding to 341,208 shares, valued at approximately $23.35 million. Other funds were more modest: Postrock Partners added 150 shares, Mount Vernon Associates added 150 shares, Wynn Capital added 150 shares, Old North State Trust added 151 shares and Lion Street Advisors added 152 shares. Overall, institutional and hedge fund ownership now stands at roughly 73%, underscoring continued confidence in Cisco’s long-term growth prospects despite near-term challenges in security hardware.
3. Analyst Ratings and Earnings Outlook
Seventeen analysts maintain a buy rating on Cisco, while nine have a hold, resulting in a consensus view of Moderate Buy. Recent earnings beat consensus by $0.02 per share on revenue of $14.88 billion, up 7.5% year-over-year, reflecting strength in software subscriptions and services. Guidance for full-year EPS of 4.08 to 4.14 and Q2 EPS of 1.01 to 1.03 suggests mid‐single-digit growth. Wall Street firms including Bank of America, Morgan Stanley and Piper Sandler have raised their target prices, citing resilient cash flow generation and expanding software margins.
4. Insider Sales and Dividend Policy
Director Kristina Johnson sold 13,481 shares and CEO Charles Robbins sold 116,734 shares in separate transactions, reducing their combined ownership by approximately 15% over the past quarter. The board also approved a quarterly dividend of $0.41 per share, marking an annualized payout of $1.64 and yielding about 2.1%. With a payout ratio near 62%, Cisco continues to balance returning capital to shareholders with reinvestment in R&D for next-gen networking and cybersecurity solutions.