How Analysts Rate Juniper After the Warning

By Chris Lange Updated Jan 13, 10:40AM EST · Published Apr 17, 10:15AM EDT

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How Analysts Rate Juniper After the Warning — © Thinkstock

Juniper Networks Inc. (NYSE: JNPR) saw its shares sink early in the week following the announcement of its preliminary financial results. These obviously were not up to par with what analysts expected, and the analysts took this opportunity to weigh in on this tech company.

Juniper now expects revenue for the first quarter to be in the range of $1.09 billion to $1.10 billion, below the company’s previous guidance of $1.15 billion to $1.19 billion, due primarily to weaker than anticipated demand from Enterprise and the timing of deployments of certain U.S. and EMEA Tier 1 telecoms. The company expects earnings per share (EPS) in the range of $0.35 to $0.37, compared to the previous guidance of $0.42 to $0.46.

Consensus estimates calls for EPS of $0.45 and $1.19 billion in revenue.

As a result, Merrill Lynch maintained a Buy rating with $31 price objective. The firm noted management’s original guidance for the quarter was 2% to 6% below street estimates on a weak macro-outlook. Merrill Lynch adjusted its estimates in line with the pre-announcement and maintain its Buy rating on an expected pickup in SP spend in the second half, cloud growth, new products, margin expansion and stock buybacks.

In its report, Merrill Lynch detailed:

We believe the company’s three core product lines should see solid growth in 2016. Catalysts for growth include new products that have a strong performance advantages, which could drive market share gains. Juniper’s security business has also stabilized and should return to growth in 2016 following years of declines.

Wells Fargo believes that the risk/reward remains attractive. With shares of Juniper trading at 11 times the firm’s new 2016 EPS estimate of $2.07, Wells Fargo thinks valuation is likely to limit downside from current levels and view evidence that fundamentals may improve beyond the calendar first quarter as a potential catalyst that could drive the stock toward the firm’s valuation range of $29 to $31.
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A few other analysts weighed in as well:

UBS downgraded to a Neutral rating.
FBN Securities has a Sector Perform rating and lowered its price target to $25 from $27.
Goldman Sachs lowered its price target to $31 from $33.
MKM Partners has a Neutral rating and lowered its price target to $26 from $27.
Stifel has a Buy rating and lowered its price target to $28 from $34.

So far in 2016, Juniper has underperformed the broad markets, with the stock down about 14%. Over the past 52 weeks, the stock is only down less than 2%.

Shares of Juniper closed trading at $23.64 on Friday, with a consensus analyst price target of $27.57 and a 52-week trading range of $21.49 to $32.39.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.