Cisco emblem exhibited by means of the Mobile World Congress, on February 28, 2019 in Barcelona, Spain.
Bank of America highlighted Cisco Systems on Tuesday, pointing to the company as having lower risk in distinction to completely different tech shares from the escalating U.S. trade wrestle with China.
“We flag Cisco’s relatively low exposure to China, which is particularly attractive in the current market environment,” Bank of America’s Tal Llanl said in a bear in mind to consumers.
The largest tech shares, commonly known as FAANG – Facebook, Apple, Amazon, Netflix and Google-parent Alphabet – have been among the many many hardest hit by trade risk, falling wherever between 4% to 8% each over the earlier week. Cisco shares have fallen 4% on the same time. Bank of America believes Cisco will bounce once more from its present drop, saying the stock has “room for upside.”
“Cisco has been actively shifting contract manufacturing and pricing to offset the previous 10% tariffs on Chinese-produced goods, and we expect such workarounds to also help soften the recent tariff increase to 25%,” Llanl said.
“Separately, we note that backlash versus Huawei’s products in certain regions may help Cisco indirectly,” Llanl added.
Cisco shares rose 1.9% on Tuesday to $52.26.
Bank of America expects Cisco’s sturdy earnings effectivity in its first two quarters “to continue,” with the company set to report third quarter earnings on Wednesday. The company has a $56 a share worth aim on Cisco.