Is There Value In A Cisco Systems, Inc. Split? Citi Weighs In

In a note published Wednesday, Citi analyst Ehud Gelblum discussed the possibility of Cisco Systems, Inc. (NASDAQ: CSCO) separating into smaller, more concentrated segments.

Gelblum noted the option of a split will at least be considered by the company's board given the likely retirement of Cisco CEO John Chambers next year. He added that Citi has long been proponents of splitting large-cap tech companies into smaller parts. However, in Cisco's case, Gelblum does not see enough upside potential to warrant a split.

If the split were to take place, Gelblum said there are three likely segments the company would be divided into: 1) an enterprise-focused cash cow, 2) a higher growth data center-focused piece and 3) a carrier-focused piece.

Assuming Cisco split into these segments, Gelblum believes it could potentially drive the value to $29 per share versus ~$25 per share currently.

Shares of Cisco Systems are holding relatively steady in the early minutes of Wednesday's market session, down 0.35 percent.