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Oppenheimer Bullish On Juniper Networks, Says Risk/Reward 'Still Compelling'

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In a report published Friday, Oppenheimer analysts maintained an Outperform rating on Juniper Networks, Inc. (NYSE: JNPR), while raising the price target from $27 to $29.

In the report Oppenheimer mentioned the bull case for the company as: "Assumes a slight recovery in service provider spending in 2H15, slight decline in 2016-17, continued traction with Cloud/cable customers, and a rebound in share gains in data center switching." Operating margins to expand only to low to mid-20 percent and 2016 and 2017 EPS estimates at $1.94 and $2.31.

The bear case assumes "service provider spending remains impaired, little traction in modular switching with limited data center growth just offsetting campus declines," the analysts said. Nokia Corporation (NYSE: NOK) and Alcatel Lucent SA (NYSE: ALU) business could erode. Operating margins to remain at ~18 percent and 2016 and 2017 EPS estimates at $1.45 and $1.45.

The bull and bear scenario analysis indicates the risk at -15 percent and the reward at 30 percent. This balance "is still very compelling," the analysts stated.

"Although not a safe bet by any means, we feel more comfortable with new management's execution and believe carrier spending patterns are poised to improve somewhat in 2H15. Aggressive buyback activity, activist involvement, and occasional M&A speculation offer downside protection," the analysts added.

Latest Ratings for JNPR

DateFirmActionFromTo
Jan 2017Deutsche BankDowngradesHoldSell
Dec 2016NomuraUpgradesNeutralBuy
Dec 2016Credit SuisseUpgradesNeutralOutperform

View More Analyst Ratings for JNPR
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Posted-In: OppenheimerAnalyst Color Price Target Reiteration Analyst Ratings

 

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