Calls of the Day: Target, Salesforce and Cisco

Stock Downgrades & Performance - Bank of America downgraded Target to underperform, with the stock down 24% year-to-date [1] - DAD Davidson upgraded Salesforce to neutral from underperform, citing declining investor sentiment [3] - HSBC downgraded Cisco to hold from buy, with a target of $69, a few dollars down from the current price [9] Company Strategies & Outlook - Target is viewed as a turnaround story, with potential opportunities despite increased competition [2] - Salesforce faces pressure to refocus on core business growth, margin expansion, and avoiding dilutive M&A [4] - Salesforce possesses important and sticky data that could be incredibly useful for AI applications [8][9] - Cisco delivered 14% earnings growth and 75% revenue growth, disagreeing with the downgrade rationale [10] - Cisco is not expected to aggressively ride the AI boom, but offers predictable mid-to-high single-digit earnings growth [11] Investment Perspective - Target's stock is considered inexpensive with low expectations ahead of the next quarter's report [3] - Salesforce's price represents an attractive entry point, with potential asymmetric upside when they figure out AI [5][7] - Cisco trades at 17 times earnings, a discount to the tech sector, with a 66% free cash flow yield, making it a potential buy [11][12]