Retail Investors See Cisco’s $15B Buyback Driving Double-Digit Gains Over The Next 6 Months

With $17 billion now earmarked for repurchases, investors remain optimistic that Cisco’s capital allocation strategy will continue to provide a tailwind for its stock.

Cisco Systems' (CSCO) new $15 billion stock buyback program has sparked bullish sentiment among retail investors, with many expecting the move to drive shares higher. 

With $17 billion now earmarked for repurchases, investors remain optimistic that Cisco’s capital allocation strategy will continue to provide a tailwind for its stock.

A recent Stocktwits poll found that 59% of respondents anticipate at least a 10% gain over the next six months, while 25% foresee a more moderate increase of 5% to 10%. 

Only 13% of investors on the platform expect a minimal impact, and just 3% believe the buyback will negatively affect the stock.

Investor enthusiasm is rooted in the expectation that large-scale buybacks reduce the share supply, boost earnings per share (EPS), and support stock valuations.

For Cisco, a mature tech company with a steady revenue stream, capital return policies have historically been well received. The company has already repurchased over $7.5 billion in stock over the past year.

Cisco's recent earnings report exceeded analyst expectations, showcasing a 9% year-over-year revenue increase to $14 billion, while EPS came in at $0.94, surpassing analyst expectations. 

In addition to the buyback, Cisco raised its quarterly dividend by 3%, reinforcing its commitment to returning capital to shareholders.

Cisco’s shares hit an all-time high of $66.50 on Feb. 13 following the earnings announcement. 

The stock has climbed nearly 9% year-to-date and is up more than 33% over the past year. 

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