Why Cisco looks like an 'value play': Expert

Cisco earnings preview

Networking behemoth Cisco reports earnings after the bell Wednesday, its first quarterly report since announcing earlier this month that John Chambers is stepping down as CEO.

Ken Leon, global head of equity research at S&P Capital IQ, has a "buy" rating on the stock and a $34 price target. In an interview with CNBC's "Tech Bet," Leon said he expects Cisco to report a flat quarter, but that the stock still represents an opportunity for value-seeking investors.

"This is a company that's growing barely low-single digits, but they're doing a lot for shareholder value and total return, so I think the messaging from this management is going to be about execution," Leon said.

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A pedestrian walks past Cisco Systems signage at the company's headquarters in San Jose, Calif.
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Leon said he expects that once new CEO Chuck Robbins gains firm footing with the investment community, he might become more innovative and strategic with potential mergers and acquisitions.

"The company is a leader and continues to innovate but that innovation is, still by the law of large numbers, hard to get this to be a double-digit grower of revenues," Leon said. "So I see it really as an attractive value play. They're a leader in technology."

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Cisco stock is a total return opportunity, Leon said. He points out Cisco has plenty of cash on the balance sheet to afford stock buybacks, dividends and potential acquisitions.

Disclosure: Leon does not own shares of Cisco.