Shares of Cisco Systems Inc. sank 2.0% in premarket trading Thursday, after J.P. Morgan downgraded the networking company to neutral from overweight. Analyst Samik Chatterjee also cut his stock price target to $51 from $62. Chatterjee said it was taking a more defensive stance on networking company given increasing signs that a slowing global economy is hurting demand. For Cisco, Chatterjee said he’s taking a “cautious view” on near-term order growth as he expects a slowdown in business spending. “We acknowledge that there is limited tangible evidence yet of a slowdown in Enterprise spending, but the increasing hesitation around spending intent we are hearing from customers makes us cautious about the order growth trajectory from hereon, while already lapping tough [year-over-year comparisons],” Chatterjee wrote in a note to clients. Cisco’s stock has dropped 16.6% over the past three months through Wednesday, while the Dow Jones Industrial Average has declined 10.7%.
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