Juniper Hits New Low

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

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unbiasedone 12/4/2012 | 7:52:53 PM
re: Juniper Hits New Low and Cisco's 10G actually doesn't deliver packets out of sequence and has things like WRED and M-DRR!!
unbiasedone 12/4/2012 | 7:52:53 PM
re: Juniper Hits New Low you will not see a Procket router for quite a while...
unbiasedone 12/4/2012 | 7:52:54 PM
re: Juniper Hits New Low HFR project not canned or backburnered...
green 12/4/2012 | 7:52:55 PM
re: Juniper Hits New Low heard the cisco HFR (huge fast router) project is going to be canned/put on the back burner. any one know more?
skeptic 12/4/2012 | 7:53:01 PM
re: Juniper Hits New Low someone say procket will release their box soon,
No, not soon.

bigger than M160.
Probably. But Juniper has two progressivly
larger products in development. One that
should release early next year and the other
one later on.
have any comment about procket?

The company is top-heavy. And many of the
expectations inside and outside of it are
unrealistic in the current market.

Neophone 12/4/2012 | 7:53:01 PM
re: Juniper Hits New Low someone say procket will release their box soon,
bigger than M160.
have any comment about procket?
HarryPotter 12/4/2012 | 7:53:07 PM
re: Juniper Hits New Low sales reps are commenting the jnpr september quarter will be 125 million in revenue and an eps loss. merrill lynch cut their estimates to 200m and 0.08 on wednesday. i believe jnpr will preannounce an earnings shortfall next friday morning, sept 7, before kriens speaks at the salomon smith barney tech conference. this stock could go to $8.

tintin 12/4/2012 | 7:53:13 PM
re: Juniper Hits New Low Reoptic,

"Meanwhile Cisco keeps turning up the heat with new boxes and aggressive sales tactics"

I am curious, which new cisco box are you referring to?

reoptic 12/4/2012 | 7:53:24 PM
re: Juniper Hits New Low This new box -- code named gibson -- seems to keep slipping badly first from spring then summer, then fall, now into next year. Been a long, long time since jnpr introduced product. Plus there are rumours of persistent issues with current boxes like packet reordering and overheating. Meanwhile Cisco keeps turning up the heat with new boxes and aggressive sales tactics, and Avici and the router startups nip at their heels. Even LR is writing something negative on JNPR...this must be the bottom!
skeptic 12/4/2012 | 7:53:27 PM
re: Juniper Hits New Low A while ago, there were rumors about a new Juniper box (M320?) scheduled to come out this fall. Is there any truth to these rumors? Based on Juniper's product history, they might go for a 8x40G box (M640?) instead, though the demand for such a product would be highly suspect in today's environment.

Its actually the reverse. Perceptions aside,
people would rather have the bigger box than
the smaller one juniper is building. The M320
comes across as a another generation of
"disposable router". Nobody wants to buy
a full-up big router necessarly, but they don't
want to buy a small piece of equipment that
will quickly become obsolete and get scrapped.
Like the M160, it's "just big enough" for
a year or possibly two.

The rumor on the M320 is that the delivery
date is slipping and it will not release in
the fall. There is a follow-on (not public)
bigger product after the M320.
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