Cisco Systems stock faces Morgan Stanley downgrade before earnings

Cisco Systems stock faced a fresh valuation test on Thursday, November 5, after Morgan Stanley downgraded the shares to Equal-weight from Overweight and lowered its price target to USD 120 from USD 135. Yahoo Finance, citing Investing.com, reported the change in a note published Thursday.

Downgrade raises the earnings bar

Analyst Meta Marshall said Cisco's strong rally leaves less room for upside before the company's fiscal first-quarter results. Morgan Stanley said the shares had risen 43 percent over the past 12 months, compared with a 14 percent gain for the S&P 500, and now trade at about 19 times forward earnings.

The broker also flagged pull-forward risk, as customers may order ahead of planned price increases and temporarily lift sales. It added that a greater share of lower-margin hardware sold to hyperscalers is weighing on gross margins.

AI growth meets margin pressure

Morgan Stanley remains constructive on Cisco's fundamentals and expects several years of double-digit growth, led largely by cloud customers. At the same time, the firm said future growth will depend increasingly on AI revenue once the company begins to lap its pricing increases in fiscal 2028.

At 3:40:51 p.m. Berlin time on Thursday, November 5, 2026, Cisco Systems stock traded at 90.00 euros on Lang & Schwarz. That was 3.06 percent below the 92.84-euro quote in the November 4 AD HOC NEWS report, a separate move from the new analyst assessment.

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The S&P 500 remains the relevant market backdrop for technology valuations and Cisco's relative performance.

More news and analyses on Cisco Systems stock will track the upcoming results and changes to the fiscal outlook.