Bank of America Provides Color on Telecom Equipment Industry

Bank of America provided color on the Telecom Equipment industry in a research report published today. Bank of America Decided to maintain its Buy rating on Juniper JNPR after a meeting with the company's CEO. The report states, "Juniper CEO Kevin Johnson provided an overview of Juniper's opportunities in both the carrier and enterprise markets. On the service providers' side, the CEO was bullish on the growth opportunities in both Edge and Core routing, starting already this year. He noted a strong product portfolio and a well rounded channels strategy. He also noted that demand from Japan appears to be in the middle of the range of their prior expectations. On the enterprise side, he noted some longer term challenges that were interpreted negatively by investors." On Wednesday, Juniper lost 9.94% of its value to close the day at $32.97. Its shares continued to close ground in today's pre-market trading, falling 0.24% to $32.89. Bank of America reported mixed feeling on Cisco CSCO after a meeting with its management. The report states, "The takeaways from the meetings are mixed. On one hand, we believe that the business will look substantially better in one year, once the company passes through the next few difficult quarters. On the other hand, we believe the comments point to a challenging environment over the next few quarters, with a focus on continued pressure on switching and public spending segments." On Wednesday, Cisco lost 2.5% of its value to close the day at $16.38. Its shares regained some of yesterday's losses in today's pre-market trading, however, rising 0.24% to $16.42. Bank of America has a Buy rating and a price target of $54 on Adtran ADTN. Bank of America also mentioned some downsides to these forecasts. The report states, "Downside risks: 1) faster-than-expected slowdowns in Adtran's legacy sales, 2) high exposure to US telco and enterprises where spending is generally lumpy, 3) pricing pressure which could affect Adtran's sector high margins and, 4) delays in the ramp of new broadband stimulus awards." On Wednesday, Adtran lost 3.27% of its value to close the day at $41.46. Amdocs DOX currently has a price target of $33 placed on its stock. Bank of America also named a number of risks for the Amdocs share value. The report states, "Risks to our price objective are: (1) Growth initiatives could prove slow to materialize (2) changes in the environment for transformational projects (3) Concentration of revenue, with about 50% of revenue comes from 3 customers and could fluctuate quarter to quarter (4) potential acquisitions could revive long- term growth and speed up the company's time to market (5) company recently announced an additional $1bn buyback that could help support the stock. On Wednesday, Amdocs lost 1.05% of its value to close the day at $30.12. Bank of America currently has a Buy rating and a price target of $125 on F5 Networks FFIV. The risks are the following: "(1) slower growth rates as comps get tougher, (2) Inability to sustain service revenue growth, (3) Traction on new products may be slower than expected, (4) Inability to further improve sales force productivity and control expenses, and (5) Deterioration in demand from the financial services and service provider verticals." On Wednesday, F5 Networks lost 3.68% of its value to finish the day at $109.40. Its shares regained some of its earlier losses in today's pre-market trading, rising 0.18% to $109.60. Meru Networks MERU also has a Buy rating on its shares. The price target on its shares is set at $24. The risks to the company's price target are: "(1) strength of the global economic and IT spending environments, (2) overall market conditions, (3) growing competition from larger vendors such as Cisco, HP, Juniper and Aruba Networks, (4) its ability to execute on its go-to-market strategy, (5) its ability to expand its technology to a broader customer base." On Wednesday, Meru lost 9.77% of its value to close the day at $16.16. Bank of America has a price target of $11 on NeoPhotonics NPTN. Bank of America named the upsides to its price target. The report states, "Upside risks to the stock are, 1) better than expected demand for optical components and systems, 2) accelerated ramp of the new designs wins at Huawei and Ciena, and 3) meaningful share gains with higher margin PIC products." Bank of America also named a couple of downside risks. The report states, "Downside risks to the stock are, 1) prolonged weakness and inventory adjustment at NeoPhotonics key customer Huawei, 2) delay in the ramp of NeoPhotonics richer margin products and 3) tougher competitive dynamics within the optical component market, and in particular, other vendors introducing technology similar to that of NeoPhotonics." On Wednesday, NeoPhotonics lost 0.31% to close the day at $9.50. At the moment, Bank of America has a price target of $40 on Riverbed Technology RVBD. Bank of America also stressed some risks for the company's price target. The report states, "The company must execute the longer term opportunities that exist in data center consolidation and virtualization. Other risks include the general macro environment and IT spending trends in data center consolidation." On Wednesday, Riverbed lost 1.77% of its value to close the day at $37.25. Its shares regained some of yesterday's losses, however, rising 0.67% to $37.50. SMART Technologies SMT currently has a price target of $11 set on its stock. The report states, " Risks to our price objective are slower than expected adoption of IWB technology related to budget constraints, execution risks on the Enterprise and Government sector strategy, ASP pressure, ligation risk related to optical touch patents, and FX risks." On Wednesday, SMART added 1.13% to its value to end the day at $7.14. Tellabs TLAB currently has an Underperform rating and a price target of $5.40 on its stock. The report states, "Downside risks to our price objective are faster than expected declines in high- margin cross connect business, increased cost pressure on access sales, lack of meaningful traction with optical transport and increased competitive pressures on new products from larger players (Alcatel-Lucent and Cisco). Upside risks: stronger than expected pickup in new broadband data products, more sustainable lifecycle for legacy cross connects, stronger gross margins from product mix, and early recovery in networking capital spending." On Wednesday, Tellabs lost 1.09% to end the day at $4.52. Its shares continued to slide in today's pre-market trading, falling 0.44% to $4.50.