Two Picks In The Communication Equipment Industry, Following Aruba Networks' Downgrade

Aruba Networks, Inc.’s ARUN stockis down more than 5.5 percent on Monday, after itwas downgraded by JMP Securities, from Market Outperform to Market Perform.

Other research firms, like JP Morgan and Bank of America are not particularly bullish either. So, let’s take a look at two other communication equipment stocks that could stand as more attractive investment options.

Palo Alto Networks Inc PANW is one way to go. Most recently –on January 6, Barclays reiterated an Overweight rating, and raised its price target to $140, from $120 less than two months ago.

On late-November, several other Wall Street research firms endorsed the stock. Credit Suisse issued an Outperform rating and a $135 price target, while Stifel Nicolaus, Nomura and Deutsche Bank gave the stock a Buy, accompanied by respective price targets of $120, $130 and $125.

Only Citigroup was more bearish, and issued a Neutral rating and a $112 price target.

The stock traded around $113-$114 at the time of the November ratings, so much of the upside potential was already realized. However, now trading around $127.50, there is still plenty of space to grow until the stock reaches the most recent – Barclays- price target.

Cisco Systems, Inc. CSCO is another (well-known) way to go. Analysts have been particularly bullish over the past month or so. On Monday, Deutsche Bank reiterated its Buy rating, escorted by a $32 price target.

Over December, Bank of America and UBS maintained Buy ratings as well, supplemented by corresponding price targets of $30 and $30.50, while Wedbush initiated coverage with and Outperform and a $31.50 price target.

The stock is up about 1.4 percent on Monday, to $28.19, so upside potential is still plenty.