Cisco Secures Splunk - A Game Changer For Growth And Free Cash Flow, Says Analyst
Portfolio Pulse from Anusuya Lahiri
Cisco Systems Inc (CSCO) secured EU clearance for its Splunk acquisition, closing the deal ahead of schedule. Piper Sandler analyst James Fish maintained a Neutral rating on Cisco but raised the price target from $47 to $51, citing the deal's potential for significant revenue and free cash flow growth by fiscal 2026. Cisco financed the transaction by raising $13.5 billion of debt. Despite some concerns, the acquisition is seen as a positive move for Cisco's growth, especially in AI and cybersecurity, although challenges in networking and cloud exposure remain. CSCO shares saw a slight increase, and the stock can also be accessed through ETFs like CIBR and FDN.
March 20, 2024 | 6:34 pm
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POSITIVE IMPACT
Investors can gain exposure to Cisco's stock, which is expected to benefit from the Splunk acquisition, through the First Trust NASDAQ Cybersecurity ETF (CIBR).
CIBR, being a cybersecurity ETF that includes Cisco in its holdings, may see positive impacts from Cisco's strategic moves, including the Splunk acquisition, as it could enhance Cisco's position in the cybersecurity market.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 60
POSITIVE IMPACT
Cisco's acquisition of Splunk is expected to significantly boost its revenue and free cash flow by fiscal 2026, with a raised price target from $47 to $51 by Piper Sandler.
The acquisition of Splunk by Cisco is seen as a strategic move to enhance its growth and financials, leading to a raised price target by analysts. The early closure of the deal and the financing strategy indicate strong planning and potential for significant impact on Cisco's future performance.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
The First Trust DJ Internet Index Fund (FDN) offers another avenue for investors to gain exposure to Cisco, which is poised for growth following its acquisition of Splunk.
FDN, as an internet index fund that includes Cisco, could potentially benefit from Cisco's enhanced growth prospects and strategic positioning in the market following the Splunk acquisition.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 60