Enterprise IT leader Cisco Systems Inc. (CSCO) saw its shares close down about 1.1% on Tuesday after a bearish note from analysts at investment bank BMO Capital. On Monday, shares reached a new 52-week high by a slim margin before cooling off later in the day. (See also: Credit Suisse Upgrades Cisco on Trump Tax Plan.)

Analysts downgraded shares of the San Jose, Calif.-based networking hardware vendor from outperform to market perform ahead of Cisco’s first-quarter earnings slated for May 17.

The investment firm also cut its price target on Cisco stock to $35 from $37, reflecting about 3.2% upside from its current valuation. BMO Capital’s Tim Long warns investors that the legacy tech firm faces significant “share losses in switching and a struggling router market,” along with a “contracting” data center business.

Analysts Highlight Declining Core Business

While Cisco is hedging against declines in its core networking hardware businesses by doubling down on an acquisition spree and investing in high-growth segments such as cybersecurity​ and the Internet of Things (IoT), routing and switching still comprise a majority of revenues. Cisco bears point to difficulty with Cisco’s core businesses as a drag on future growth as the firm loses out to newer cloud-based networking competitors such as Arista Networks Inc. (ANET) and Juniper Networks Inc. (JNPR).

Last week, analysts at Credit Suisse issued a double upgrade on shares of Cisco, suggesting a new Trump tax plan could boost the firms M&A activity and drive long-term EPS growth.

Trading at a price of $33.90 per share, CSCO reflects an approximate 32.4% gain over the 12-month period and a 12.2% gain year-to-date (YTD). (See also: Cisco Rivals Post Q1 Earnings.)

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