CS First Boston keeps its buy rating on Cisco (CSCO )
Analyst Lissa Bogaty says the company delivered a big upside surprise on gross margin (67.7% vs. her 62.5% estimate). However, she notes the company's revenue guidance was cautious, as expected. She thinks the Street will cut its revenue estimates, which could keep the company's price-earnings ratio under pressure for a while. She notes she still sees year over year revenue growth of 9% by the end of fiscal 2004, but has cut her 7.3% fiscal 2003 (July) growth estimate to 4.5%. As for earnings per share estimates, which she cut recently, Bogaty raised her $0.58 fiscal 2003 to $0.63 due to strong margins. She also maintains her $14 target.