Juniper Networks: 4Q14/1Q15 Outlook is Unclear, Says UBS Analyst
In a research report issued today, UBS analyst Amitabh Passi assigned a Buy rating on Juniper Networks (NYSE:JNPR) and slightly reduced his price target to $27 (from $29), following the company’s preliminary third quarter 2014 results.
Passi wrote, “Over the past few days, we have seen an increasing number of negative preannouncements from technology companies (A10, Adtran, EZChip, Riverbed, Spirent) many citing weakness in spending at US service providers (SPs). Juniper lowered its 3Q Revs/EPS forecast to $1.11-1.12b/$0.34-0.36, down from its previous guidance range of $1.15-1.18/$0.35-0.40, primarily due to lower-than anticipated demand from US SPs. Reduced operating expenses and lower variable compensation, along with, we believe, lower share count, helped limit EPS downside risk.”
The analyst continued, “Following the lowered outlook for 3Q, we turn our attention to 4Q14 and 1Q15. Typically, 4Q tends to be seasonally up and 1Q down. However, with limited visibility complicating the outlook, we will be looking to the October 23rd call to get a better handle on how to think about revenue and opex trends over the next 6 months. From a mid-longer term perspective, we remain constructive on edge routing and data center trends, with Security the one area that still needs to prove itself out.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Amitabh Passi has a total average return of 6.5% and a 57.5% success rate. Passi has a -14.5% average return when recommending JNPR, and is ranked #749 out of 3319 analysts.