Courtesy of Benzinga.
Cisco Systems, Inc. (NASDAQ: CSCO) should follow the lead of eBay Inc (NASDAQ: EBAY), according to RBC Capital Markets analyst Mark Sue, by unlocking shareholder value via spinoffs.
Sue feels the fast growing wireless, security and data center segments, which generate more $10 billion annually and are growing at 15 to 20 percent rate, could be separated, thus attracting both growth and value investors. This could potentially unlock a higher stock price.
Sue feels the value side of Cisco is worth $22 to $24 per share, while the growth side should be valued at $9 to $11 per share. Add in the $6 in cash that is presently on the balance sheet, and Sue estimates a spinoff could drive Cisco's value to $37 to $41 per share, or 47 percent to 63 percent higher than Wednesday's closing price of $25.03.
Latest Ratings for CSCO
Date | Firm | Action | From | To |
---|---|---|---|---|
Oct 2014 | Atlantic Equities | Initiates Coverage on | Overweight | |
Aug 2014 | Barclays | Maintains | Equal-weight | |
Aug 2014 | Stifel Nicolaus | Maintains | Buy |
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Posted-In: Mark Sue RBC Capital MarketsAnalyst Color News Analyst Ratings