According to RBC Capital Markets, Juniper Networks may be working on a major re-launch of their WAN acceleration platform.
RBC Capital Markets Managing Director - Mark Sue commented to yours truly:
 "Juniper's feeling good about its product cycle and ability to compete with larger vendors is the sense that we've got from our discussions with CFO Robyn Denholm at the RBC Capital Markets Technology Conference." |
"With positive trends expected to continue for the back half, we are reiterating our Outperform Rating."
"Juniper has one of the strongest product portfolios in recent history which includes revamped high-end routers, edge routers, and enterprise switches."
"Although some investors may be concerned about intensifying competition from Cisco, we're of the view that both companies may see positive secular growth trends as it relates to IP."
"Improving execution on the enterprise side may give Juniper some added tailwind."
"The CEO transition should be pretty smooth, according to Juniper, and thus far the reception internally has been positive."
"Current CEO Scott Kriens is likely to remain for some time, further allowing for a seamless transition."
"Additionally, with Juniper's current backlog and conservative guidance, we do not believe a resetting of the bar is a likely scenario."
"Scaling the business while balancing operating expenses may be a recurring theme as we close 2008 and move into the New Year."
"To that end, we don't think any pending acquisitions are in the works, and a balanced approach to make vs. buy decision is likely to persist, in our view."
"Nonetheless, there are certain parts which are lagging, notably WAN Acceleration."
"Juniper may be working on a major re-launch which should help its prospects in branch office networking."
"Juniper could print 25% operating margins today if they wanted to, yet it's a balance between investments and margin improvements."
"Having said that we believe Juniper should show good sequential improvement from current levels of 23.6% and exit the year at 25%+ operating margins."
"Furthermore, we don't expect major swings in operating margins once this near term metric is reached."
"The market for routing remains healthy, a positive trend which should benefit both Cisco and Juniper."
"With a healthy new product cycle combined with improving field execution, Juniper may see healthy topline growth this year close to our estimate of 27%."
"Improving financial metrics may enable Juniper to see faster earnings growth."
"Juniper shares currently trade at 18X our 2009 EPS estimates and 2.5x our 2009 revenue estimate net cash."
"Our price target is $30 and represents a multiple of approximately 21x our 2009 EPS estimate, a premium to the peer group average due to our assessment of the healthy outlook for router growth, which may even accelerate this year driven by the growth in video: cable, IPTV, as well as web based."
"Impediments to reaching our price target include competitive pressures, a prolonged IT spending recovery period and geo-political risks."
"Specifically for Juniper, we believe execution risk may play a role if the company has difficulty in expanding its enterprise channels while integrating its numerous acquisitions."
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