Juniper Networks Inc.'s (Nasdaq: JNPR) stock dipped Wednesday to a new low after a Merrill Lynch & Co. Inc. analyst cut his earnings forecast for the network equipment maker.

Juniper slumped in morning trading to $15.28 a share, dipping below a 52-week low of 15.74 set on Aug. 22. The stock staged a modest rebound to close at 15.54, still well down from Tuesday’s close of $16.70.

Due to weaker demand for Juniper’s high-end routers, Merrill Lynch analyst Samuel Wilson cut his earnings-per-share outlook for the September quarter to 8 cents from 9 cents. Wilson expects Cisco Systems Inc.’s (Nasdaq: CSCO) release of its 12400 products to stymie Juniper’s growth, and he sees the overall market this quarter possibly shrinking as much as 10 percent.

He also lowered his 2001 estimate to 50 cents from 52 cents and slashed his 2002 numbers to 55 cents from 66 cents. Despite (or perhaps because of) the downward pressure Wilson put on the stock, he still has an Accumulate rating on Juniper.

The First Call consensus of analysts is still a bit more optimistic than Wilson. The consensus is 9 cents for the September quarter, 52 cents for the year, and 60 cents next year. The consensus gives Juniper a buy/sell rating of 2.2. (A no. 1 rating is a Strong Buy, a no. 2 is a Buy, and a no. 3 is a Hold.)

Despite the weak buy rating, the consensus has a median $39 target price over the next 12 months. That’s about two-and-a-half times Juniper’s current price and probably not very realistic. It’s also an indication that many analysts haven’t updated their targets after the most recent freefall in prices.

Last October, Juniper was soaring at a 52-week high of $244 a share.

— Tom Davey, special to Light Reading, http://www.lightreading.com