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Cisco Systems (CSCO) Rallies on Morgan Stanley Upgrade

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On Monday, shares of Internet networking leader Cisco Systems (CSCO - Free Report) are rallying, up about 2.8% to $34.39 per share in afternoon trading on the heels of a rating upgrade from Morgan Stanley. Cisco’s jump helped push the Dow Jones more than 100 points higher

Analyst James Faucette upgraded Cisco from “equal weight” to “overweight,” with a $39 price target. The upgrade follows a major shift toward security-defined networks, and Faucette believes this could be a potential long-term growth driver for Cisco, making the stock a great opportunity for investors who want to capitalize on this change in the cybersecurity industry.

“Cisco continues to drive a mix shift towards software and recurring revenues, and in conjunction with strong firewall refresh activity, will gain share of IT budgets as customers increasingly favor Cisco’s end-to-end portfolio and architecture to improve cybersecurity,” Faucette added.

Faucette also predicts management driving market share gains in software and improving replacement cycles that provide long-term EPS growth.

CSCO stock also got a likely bump from the massive cyberattack that occurred over the weekend, affecting some of the biggest names in the cybersecurity industry. Companies like FireEye and Palo Alto Networks (PANW - Free Report) saw their shares soar as a result.

Currently, CSCO is a #4 (Sell) on the Zacks Rank, with a VGM score of ‘B.’ The company reports its next quarterly earnings on May 17 after the bell, and Zacks expects earnings of 53 cents per share and revenues of $11.89 billion.

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