Wells Fargo lowers Cisco stock price target on market compression

Wells Fargo reduced its price target for Cisco Systems Inc. (NASDAQ: CSCO) to $130 from $150, maintaining an Overweight rating. The adjustment was made due to market compression, while acknowledging Cisco's strong first-quarter fiscal 2027 results and guidance for the second quarter and full fiscal year 2027. Cisco's growth was fueled by continued momentum in networking, with improved visibility for fiscal 2027 and a $1.5 billion incremental webscale AI revenue forecast.

The stock rose 8.7% in the previous week, contributing to a 35% year-to-date gain. Cisco reported broad-based networking demand and confidence in a multi-year campus upgrade cycle, with orders up 14% year-over-year. Despite the positive outlook, Cisco's campus refresh transition remains under 10% complete. InvestingPro highlights the company's recent strong returns and its 16-year streak of dividend increases.

Cisco's supply chain for silicon and optics remains positive. The stock is currently trading above its Fair Value, according to InvestingPro analysis. Cisco's Q1 fiscal results exceeded expectations, with non-GAAP earnings of $1.40 per share on $18.5 billion revenue. The company forecasted 18% revenue growth for Q2 and 17% for the second half of the fiscal year.