Peter - as you can see from the facts & figures I've posted here, analysts are expecting 97/96 to be great for CSCO (50% growth compared to 17% networking sector), but for things to slow down in 98/97 (32% growth, compared to 35% networking sector). That is, analysts expect the networking industry as a whole to grow, but for Cisco to lose market share to other players. In the long term, the median analyst recommendation picks up a little to 35%.
If this happens, Cisco isn't a great buy - I'd forecast a 7/97 share price of around $72 and a 7/98 share price of between $88-$96 depending on how optimistic the market is at that time about Cisco's prospects. The CNBC 12-month $78 price target fits pretty well with this.
If, on the other hand, you believe that Cisco is as smart as some analysts believe, and can protect itself from competitors through acquisitions and/or new low-end products (such as the Micro Webserver), and can beat estimates up to 7/98 and continue growing at the 50% rate it's on now, then the stock should see $100 by 7/97 and $144 by 7/98. |
