SoundView downgraded Cisco Systems (CSCO) to neutral from outperform.
Analyst Ryan Molloy says with five weeks remaining in the fourth quarter, Cisco's business is tracking in line with management's flat guidance, however, pent-up demand that fostered some optimism at the end of April has given way to more subdued demand in May and June.
Molloy says investor perception that a mild recovery is underway has driven shares higher, and while sentiment is better, the impact on the fourth quarter seems moderate at best, and the outlook for second-half business trends remains unclear. With fundamentals unchanged, he sees little evidence to support the shares advancing ahead. Molloy maintains his $17.50 target.