One must dissect the report to understand it.
First, the Strong Buy recommendation can be considered part of the pre-printed page, just like a letterhead. All analysis must contain these words. It's almost like the words we so often read from other industries: Batteries not included, or Your mileage may vary. Without the Strong Buy, the analyst cannot expect the co-operation from management, which is needed because without company guidance, the whole world will see him as without a clue.
The 25% price decline could be his opinion, or it may not. It depends on the desires of the man who signs his paycheque. Have you signed his cheque? If not, then don't expect him to be working on your behalf.
Many have observed that after downgrade tidal waves, prices seem to advance, just like they decline following massive upgrades. An impartial observer could be forgiven for questioning the value of analyst opinion when the value of following their advice over time is assessed.
So, will CSCO decline 25% from here? Perhaps, but probably not. Will it double in 12 months? Perhaps, but probably not. Do you feel that CSCO shares meet your criteria as a good investment at today's prices?
Cheers, PW. |
