Goldman Sachs analyst Rod Hall downgraded Cisco Systems to Neutral from Buy with a price target of $48, down from $56. The stock closed Wednesday up 45c to $46.84. Large enterprise spending will continue to weaken and telecom spending activity will remain depressed in the near term, Hall tells investors in a research note. The analyst notes that Goldman's Enterprise Activity Index deteriorated in September, while his latest reseller survey was also incrementally negative on enterprise spending trends. In the telecom segment, Hall is concerned that negative trends could persist "well into" 2020, driven by carrier pauses ahead of 5G and needed carrier network automation implementation. He thinks the market will move Cisco's multiple down to his price target, which he notes is closer to the company's historical price-to-earnings ratio.

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