Juniper Networks ( NYSE: JNPR ) shares rose on Friday as investment firm Raymond James upgraded the networking equipment company, citing new router contracts that may lead to a new cycle.
Analyst Simon Leopold raised his rating on Juniper Networks ( JNPR ) to strong buy from outperform, noting that recent deal wins from Verizon ( VZ ) and Google ( GOOG ) ( GOOGL ) could wind up proving 2023 estimates too low. When combined with Ciena's ( NYSE: CIEN ) last report, as well Juniper-specific positives, the stock was worthy of an upgrade.
"Juniper’s substantial backlog, price hikes, and campus share gains present tailwinds," Leopold wrote.
The analyst raised his third-quarter revenue and adjusted earnings per share estimates to $1.348B and 50 cents per share, while also raising his full-year estimates for 2022 to $5.2B and $1.84 per share, respectively.
He also boosted 2023 estimates to $5.6B and $2.34 per share, up from $5.5B and $2.24 per share.
Leopold noted that the new deals should start in the first-half of next year and provide "material contributions" by the second-half, while also accelerating routing sales into a "sustainable" $2B run rate or more.
Juniper ( JNPR ) shares gained nearly 2.7% to $28.35 in premarket trading.
Leopold explained that although Juniper ( JNPR ) is often compared to Ciena ( CIEN ) and becomes "guilty by association," the fact remains that the two companies are executing very differently.
"Juniper gets compared to Ciena, which actually saw supply chain challenges degrade last quarter; we remain constructive that constraints eased for Juniper, and it likely delivers an in-line quarter," Leopold added. "Its customer mix provides some buffer against a possible recession, and we expect share gains to continue."
Earlier this week, investment firm Piper Sandler raised its rating on Juniper Networks ( JNPR ), noting the company will be "flush" with orders working their way through the industry's supply chain in 2023 .
Analysts are largely cautious on Juniper Networks ( JNPR ). It has a BUY rating from Seeking Alpha authors , while Wall Street analysts rate it a HOLD . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates JNPR a HOLD .
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Juniper Networks rises as Raymond James upgrades, citing new router win deals