Analysts have increased their targeted prices CISCO, Inc. (Csco)) Based on management guidelines. CSCO options (OTM) can be a good strategy here.
Csco is closed in 68.21 dollars On Friday, September 19. This represents an increase in the lowest level of $ 66.53 on September 12. However, it decreased from its peak of $ 71.79 on August 8.
CSCO – last 3 months – Barchart – September 19, 2025
I wrote a month ago that CSCO was worth 75.81 dollars Based on free cash flow (“CISCO’s powerful cash flow can make CSCO shares of 14 % more“Parchart, August 18).
I also suggested that the toys be placed. This article will review these prices and short play strategy.
Since my last article, analysts have kept their revenue expectations about the same thing. They expected approximately $ 60 billion ($ 59.66 B) in sales this year, and ends July 2026.
In the last quarter, CISCO A. 27.38 % Free cash flow margin (FCF) on sales, according to stock analysis. Over the past year, FCF represented 23.46 % of revenues.
Therefore, on average, we may expect FCF to arrive 25.4 % From prediction sales:
Using the return scale of 5.0 % FCF (i.e. multiple 20x FCF), the maximum CISCO market can reach $ 303 billion:
15.15BX 20 = 303 billion dollars MKT CAP
This is 12.37 % higher than the maximum today market of $ 269.648 billion (Yahoo! finance Data). Therefore, the value of CSCO +12.37 % more:
$ 68.21 x 1.1237 = 76.65 dollars For one stock
Therefore, we have raised our target price a little from $ 75.81 to $ 76.65. Analysts also raised their goals.
For example, Yahoo! The financing survey shows that 26 analysts have the price goal $ 76.10Up from $ 75.58 a month ago, as shown in my article on August 18. The Barhart poll shows a jump of $ 75.06 last month to $ 76.58.
Moreover, the scanning of 21 analysts shows a target of the price 79.18 dollarsRight from $ 77.17 a month ago. This represents the increase of +16 % of the closure of Friday.
The bottom line here is that CSCO’s prices move a little higher. But the upward trend is still limited – between +12.4 % and +16 %.
This represents a good opportunity for sellers open from outside money (OTM). This is especially the case if CSCO remains close to its current price during the next month.
Last month, she discussed the abbreviation of the strike price of $ 64.00 on September 19. At that time, CSCO reached $ 66.50, so the play was 3.76 % of money (OTM).
The installment that was received was $ 0.62, or about 1 % of the return for one month (i.e. $ 0.62/64.00 dollars = 0.96875 %).
Since CSCO was closed at $ 68.21, the investor has not been obliged to buy 100 shares at $ 64.00, and the return game worked well.
Note that CSCO increased by 2.57 %, so investors who also have CSCO shares and PUTS also would have made the most money.
This play can be repeated. For example, the expiration period of the following month (i.e., ends on October 24), that the PUT option of $ 66.00, is 3.24 % outside the money, has a medieval installment of $ 0.97.
This means that the short sellers of this contract can make an immediate return for one month 1.47 % (That is, $ 0.97/66.00 dollars = 0.0147).
CSCO is placed on October 24 – BARCART – as of September 19, 2025
To do this, the investor must first secure $ 6600 in cash or purchase energy with the brokerage company. After that, after entering an order “for sale” 1 with $ 66.00, the account will immediately get $ 97.00.
As a result, regardless of what is happening, the net tie point in the investor must be CSCO Dall, $ 66.00 – $ 0.97, or 65.03 dollars.
This is -4.66 % less than Friday from $ 68.21. Therefore, it provides good negative protection. This also means that current investors have an opportunity to reduce their purchase cost.
Note that the percentage of Delta has exceeded about 30 %. This means almost the chance of CSCO shares to $ 66.00 over the next month, based on previous trading patterns.
Therefore, this play is not without the risks of the negative side. This may lead to an unreasonable loss, if CSCO decreases to less than $ 65.03 tie.
However, keep in mind that the worst thing here is that the short investor will end up having CSCO shares. Therefore, based on our target goal, the tie point provides the highest level:
76.65 dollar targeted price / 65.03 dollar tie = 1.1787-1 = +17.87 % upside down
Moreover, keep in mind that the short investor who can always sell external calls if their guarantees are set to buy shares at $ 66.00. It can relieve the downside and any potential capital loss. They can also continue to put more otm and collect more income to reduce any loss.
In addition, the investor can roll on any possible short losing play to a later period and hope to compensate for any loss. BARCART has an educational center of options that provide online seminars on how to do this.
The bottom line here is that CSCO shares look cheap. The default that puts it outside the money (OTM) is one of the ways to play CSCO in a profitable way, especially if it remains relatively flat during the next month.
On the date of publication, Mark R. Hack, CFA parking (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are only for media purposes. This article was originally published on Barchart.com