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) gained 1% this morning after Deutsche Bank upgraded the networking equipment gorilla from hold to buy.
So what: Along with the upgrade, analyst Brian Modoff raised his price target to $30 (from $25), representing about 22% worth of upside to yesterday's close. So while contrarians might be turned off by Cisco's price strength in recent months, Modoff's call could reflect a sense on Wall Street that the company's growth prospects still aren't fully baked into the valuation.
Now what: According to Deutsche, Cisco's risk/reward trade-off is rather attractive at this point. "A mosaic view from our meetings with the networking IT channel, IT buyers, and senior management at Cisco Live gives us conviction on a stronger than anticipated ramp of Cisco's new platforms in Datacenter Switching, Next Gen Routing and Security, Wireless, and Cloud IT Services -- heading into the FY-end Jul Q and into FY15+," said Modoff. "Cisco usually performs a point or two ahead of GDP growth -- correlates with our CY15 est for 5.8% Y/Y rev growth." When you couple that upbeat outlook with Cisco's still-juicy 3% dividend yield, it's tough to disagree with Deutsche's bullishness.
Leaked: Apple's next smart device (warning, it may shock you)
Apple recent recruited a secret-development Dream Team to guarantee their newest smart device was kept hidden from the public for as long as possible. But the secret is out...and some early viewers are even claiming its everyday impact could trump the iPod, iPhone, AND the iPad. In fact, ABI Research predicts 485 million of these type of devices will be sold per year. But one small company makes this gadget possible. And their stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!
Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.