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Robbie Stephens Cuts Cisco Estimates


Robertson Stephens lowered fiscal 2001 and 2002 earnings per share estimates on Cisco Systems (CSCO).

Analyst Paul Johnson says he interprets recent press from the company as a second pre-announcement. He believes investors are expecting from Cisco similar growth to that of key competitors who continue to take market share from the networking giant, and have future growth visibility. Johnson notes the stock's valuation has decreased steadily, and appears to be falling back to prior levels. Interestingly, Cisco has never seen a combination of a poor economic outlook and a loss of competitive advantage; therefore, the analyst thinks valuation may see levels approaching the 20 times EPS level of the 1990's. The analyst believes that although the share price is seductive, there is still significant near-term downside to stock.

Johnson lowered his EPS estimates of $0.59 for fiscal 2001 (July) to $0.50 and of $0.55 for fiscal 2002 to $0.27. He maintains his market perform rating on Cisco.


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