Needham Lowers Cisco to 'Hold'

Analyst Tad LaFountain is concerned about lack of visibility for 2002

Needham downgraded Cisco (CSCO ) to hold from buy.

Analyst Tad LaFountain says Q4 results are within guidance, and says Q1 revenues are believed to be flat to down 5%, although the company indicated that lack of visibility precludes ruling out results outside that range. He notes Cisco offered no guidance for fiscal 2002 (July), and he cut the $21.7 billion fiscal 2002 revenue estimate to $18.5 billion, and trimmed the $0.32 fiscal 2002 EPS to $0.18.

LaFountain sees a rebound in fiscal 2003, with estimates of $0.49 EPS on revenues of $25.5 billion. He says the diminution of the company's near-term outlook leads to a drop in his long-term revenue growth forecast to 20% from 24%. He cut the $21 target to $16.

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