Juniper Ntwks Up Against CSCO

Juniper Networks, Inc. (JNPR - Analyst Report) is enjoying robust growth in its infrastructure business as service providers spend on next generation networks. The company is well-positioned in the router business.

Although its SLT business has been disappointing as it has yet to gain strong traction in the enterprise market, we believe the service provider market will be enough to sustain recent momentum. In light of this, we maintain a Hold recommendation on the shares of JNPR.

Juniper faces stiff competition in each of its market segments, especially from industry leader Cisco Systems (CSCO - Analyst Report), which continuously implements product upgrades and follows an aggressive marketing strategy, creating considerable pricing pressure on its competitors. Moreover, Juniper is also exposed to customer concentration risks.

Shares of JNPR are currently trading at a P/E multiple of 23.3x our 2008 earnings estimate of $0.97. With renewed strength in the service provider market and a forecast for expanding margins, we believe the company is one of the best positioned in the industry. We set a price target of $24.00, which represents a P/E multiple of 24.7x 2008 earnings estimates.

Read the full analyst report on JNPR