Nov 14 (Reuters) - Cisco Systems Inc's shares were set to open about 13 percent lower after the network equipment maker forecast a steep drop in revenue, prompting at least two brokerages to downgrade its stock and 12 to cut their price targets.
The company said on Wednesday that it expected an 8-10 percent fall in current-quarter revenue.
Cisco reported lower-than-expected revenue for the quarter ended Oct. 26 mainly due to a fall in sales to telecom and cable service providers and in emerging markets.
Analysts cut the price target on Cisco's stock by as much as $6 to a low of $20.
"While our checks noted emerging markets weakness, we were clearly wrong on magnitude of the order weakness," Deutsche Bank analyst Brian Modoff said in a note.
Modoff downgraded Cisco's stock to "hold" from "buy", and cut his price target to $25 from $28.
The company's revenue warning comes after a former U.S. spy agency contractor exposed widespread surveillance by the National Security Agency through internet data, much of which is transmitted via Cisco's network equipment
Cisco Chief Financial Officer Frank Calderoni said the company was affected by a political backlash in China, but it was difficult to quantify how much of its revenue shortfall was due to the issue.
In a note titled "An outlook to make even mom look twice", RBC Capital Markets analyst Mark Sue said the China issue might linger for a while for Cisco.
Sue cut his price target on the stock to $22 from $24, maintaining a rating of "outperform".
Analysts also said Cisco faced stiff competition from companies such as Aruba Networks Inc, Alcatel-Lucent SA , Brocade Communications Systems Inc, Ciena Corp, F5 Networks Inc, Riverbed Technology Inc and Juniper Networks Inc.
Cisco looks increasingly vulnerable to technological innovations and competitive pressures, Credit Suisse analyst Kulbinder Garcha said in a note.
Garcha cut the price target on Cisco's stock to $20.
Cisco shares were down at $20.93 in trading before the bell. The stock closed at $23.99 on Wednesday on the Nasdaq.
(Reporting by Neha Alawadhi in Bangalore; Editing by Kirti Pandey)