Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Cisco Systems (NASDAQ: CSCO ) traded sluggishly on Tuesday after Barclays downgraded the networking gear gorilla from overweight to equal weight.
So what: Along with the downgrade, analyst Ben Reitzes lowered his price target to $23 (from $25), representing about 7% worth of upside to yesterday's close. So while contrarians might be attracted to the stock's weakness over the past several months, Reitzes' call suggests that the demand headwinds working against Cisco aren't letting up anytime soon.
Now what: Barclays now expects Cisco to post 2015 EPS of $2.12 on revenue of $48.1 billion, down from its prior view of $2.18 and $48.5 billion. "We believe uneven demand trends, secular headwinds, and a lack of major catalysts could keep shares range-bound over the next year," said Reitzes. "[M]aterial upside to estimates does not seem likely at this point and it is also unlikely for the shares to rerate higher until it becomes clear that the company can successfully execute on its major product transitions and fully participate in Cloud and software defined networking (SDN)." Of course, with Cisco trading at a clear P/E discount to its space and boasting a juicy 3.5%-plus dividend yield, those concerns might be providing patient Fools with a solid long-term income opportunity.
More reliable ways to build wealth
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend-paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.