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Pro Analysis

Cisco is in a 'tough spot' heading into 2017, JPMorgan says

Cisco CEO Chuck Robbins.
Pradeep Gaur | Mint | Getty Images
Cisco CEO Chuck Robbins.

Shares of Cisco Systems may be about to hit a wall, as the network equipment maker struggles with rising rates, a strong dollar and market share losses in the months ahead, according to JPMorgan, which on Wednesday reiterated a neutral rating on the name.

"Cisco is in a tough spot heading into 2017 as we see few company-specific drivers of revenue and, if anything, the lack of both switching and routing product cycles that could mean below-trend growth. We also see rising interest rates as a challenge to Cisco's pseudo bond status among income- and value-oriented investors," equity analyst Rod Hall wrote in a note to clients.

This year, shares of Cisco are up 12 percent compared with a return of 11 percent for the S&P 500 index, as investors hope that a string of recent acquisitions could boost earnings in spite of these headwinds.