Analysts notes lift Cisco shares ahead of earnings

 NEW YORK, Aug 3 (Reuters) - Shares of Cisco Systems Inc (CSCO.O) rose 2 percent on Monday after a string of upbeat analysts notes and growing confidence in an economic recovery propped up expectations for the network equipment maker's quarterly results due later in the week.

Bernstein Research analyst Jeff Evenson said that after talking with industry contacts and looking at overall economic trends, he believed the company's quarterly results would likely come in at the higher end of its estimates.

Cisco, scheduled to report results after the market closes on Wednesday, had forecast a 17 percent to 20 percent drop in revenue from a year earlier.

"Revenue guidance given last quarter appears to have been generally conservative, assuming that demand would not stabilize or recover," said Evenson, forecasting quarterly revenue of $8.6 billion, down 17 percent from a year earlier.

Analysts on average expect $8.4 billion, down nearly 19 percent from a year earlier, according to Reuters Estimates.

Shares of the world's biggest manufacturer of routers and switches rose 43 cents to $22.44, outperforming the Nasdaq composite's .IXIC 0.6 percent rise.

UBS raised its target on the shares to $22.50 from $20.50, and Jefferies & Co. raised its target to $26 from $24.

The shares have risen around 14 percent in the past three months on hopes of an economic recovery, although many analysts have warned a substantial recovery in technology demand may take longer than many investors expect.

Morgan Keegan analyst Simon Leopold said he believes the communications equipment market bottomed out in the January-March quarter.

"We think the stock bounced off the bottom when the macro economy seemed to bottom, and now with initial signs of recovery, albeit muted, we think the stock can continue to appreciate," he said.

Leopold added that he expects Cisco to strike an "incrementally more positive" with investors, and that even if quarterly revenue falls as much as the market expects, cost-cuts may help earnings exceed the market's consensus of 28 cents per share before items.

REUTERS: