JPMorgan Notes 'Upside Risk' At Juniper Before Earnings

In a report published Thursday, JPMorgan analysts maintained an Overweight rating on

, saying that the company's results this year may receive a slight boost from currency tailwinds. Favorable currency movements may have a 1 percent positive impact on Juniper's 2015 EPS, if underlying demand remains unchanged. While Juniper's sales and Product COGS are denominated in the US dollar, its Services COGS and Opex are denominated in a mix of currencies. Other currencies have depreciated by 2-6 percent versus the US dollar since January 27, "driving slightly lower opex in USD relative to revenue." The total Service Provider routing market outperformed JPMorgan's estimate by about 7 percent in Q4. The analysts expect the market to have developed broadly in-line with seasonal trends in Q1, although there may have been some weakness in cell site routing. Juniper's share in the high-end enterprise routing category continues to contract and may have shrunk in 1Q15. Meanwhile, security revenue is estimated to decline 33 percent y/y to $89.4m in 1Q and 30 percent y/y to $78.4m in Q2. Switching performance may be reported in-line with expectations.