Shares of San Jose, Calif.-based tech giant Cisco Systems Inc. (CSCO) continued to rise Thursday as the Street applauds the legacy computer networking company's ongoing transition away from hardware and expects the firm to benefit big from the recently passed Republican tax overhaul. 

Piper Jaffray is the latest to assume coverage on CSCO with an overweight rating and a price target of $44, representing a 10% upside from Thursday afternoon. Trading up 0.3% at $40.02, the tech stock has already gained 4.5% in the new year. (See also: Cisco Could Be the Next Microsoft, Says Bernstein.)

Transformation Set to Boost FCF

James Fisher of Piper Jaffray was upbeat on CSCO in a research note, highlighting the firm's successful movement toward a software-based model which should boost free cash flow (FCF). He indicated that investors are underappreciating CSCO's transformation, which has already shown results in the fiscal first quarter in terms of impressive security growth, recurring revenue growth and a steady capital allocation program. 

Fisher also expects the nearly $200 billion tech titan to gain on the GOP tax plan, set to incentivize cash repatriation. "Cash repatriation allows for Cisco to likely repatriate ~$48 billion in after-tax cash which will most likely go towards buybacks, and a slightly higher than earnings growth dividend raise," he stated. The analyst noted that while investors are likely to home in on Cisco's potential M&A, his team believes the company will continue to look at promising private companies and in the high-flying applications and security industries. 

Also this week, analysts at Bank of America issued a bullish note on CSCO stock in which they upgraded shares to buy from hold. A new price target of $46, reflects an 15% upside from current levels. BofA's Tal Liani wrote that after years of uncertainty, the Street is finally gaining some clarity on Cisco's transition to software, allowing for higher margins and more profitability and a higher valuation.  (See also: Cisco Surges to 17-Year High on Revenue Forecast.)