CSCO
Cisco Systems, Inc.
$120.41
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 72.6% above fair value
You pay
$120.41
Bear
$55.80
Fair
$69.75
Bull
$83.70
Bear
$55.80
-53.7%
$2.76 × 12x P/E
Fair
$69.75
-42.1%
$2.76 × 15x P/E
Bull
$83.70
-30.5%
$2.76 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
43.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $122.30 from 73 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $69.75 per share.
Warnings
Dividend-based valuation: $28.46 (below our primary estimate by 31%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $122.30 (from 73 analysts). Our estimate is 66% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples