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The Zacks Analyst Blog Highlights: Cisco Systems, Arista Networks, Juniper Networks and NETGEAR

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For Immediate Release

Chicago, IL – March 31, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Cisco Systems, Inc. (CSCO - Free Report) , Arista Networks, Inc. (ANET - Free Report) , Juniper Networks, Inc. (JNPR - Free Report) and NETGEAR, Inc. (NTGR - Free Report) .

Here are highlights from Tuesday’s Analyst Blog:

4 Stocks Poised to Gain from Uptick in Campus Networking Spend

The coronavirus-led lockdowns marred the prospects of companies engaged in providing campus-networking solutions.

Per Gartner data, overall IT spending dipped 3.2% in 2020, globally, as companies focused more on technology and services spend that was judged “mission-critical” through the early stages of the coronavirus crisis.

However, the gradual reopening of economies with people returning to offices and students resuming commutes to schools and colleges encouraged by the vaccination rollouts is expected to result in a rebound in enterprise spending on campus-networking offerings.

According to Gartner data cited above, IT spending is forecast to hit $3.923 trillion in 2021, indicating 6.2% growth from the 2020 reading. The accelerated digitalization and the reinstatement of economic activities are expected to propel the recovery in IT spend.

Particularly, spending on IT services is expected to total $1.073 trillion, suggesting a 6% rise on a year-over-year basis. Likewise, spending on Communications Services is projected to amount to $1.411 trillion, implying a 4.5% increase year over year.

This strengthens the position of companies like Cisco SystemsArista Networks, Juniper Networks and NETGEAR to capitalize on the projected uptick in enterprise spending on campus networking.

In fact, Goldman Sachs recently upgraded Cisco from ‘Hold’ to ‘Buy’ rating and raised its target price to $59 from $50. The optimism surrounding growth in campus-switching revenues for fiscal 2022 and an improvement in general IT spending compelled this upgrade, per analyst Rod Hall.

Markedly, the networking giant company’s stock closed at $52.52 on Mar 29, up 5.8% from the closing price of $49.65 on Mar 24. Also, it must be noted that shares of Cisco have been up 14.4% in the past month following the upgrades and target price revisions by major Wall Street analysts including the likes of JP Morgan and Piper Sandler.

Further, in a recent interview on Yahoo Finance Live, the company’s CEO Chuck Robbins stated that Cisco is well-positioned to make the most of President Joe Biden’s proposed infrastructure plan. In the $2-trillion infrastructure plan titled Build Back Better, Biden designated $300 billion for investments across 5G and AI verticals.

As the bill gets passed (chances of which are high), efforts to enhance the broadband build-out is expected to help Cisco’s customers. This, in turn, will lead to more build-out of infrastructure and acceleration of 5G deployments, which bode well for the networking gear provider, per Robbins.

In second-quarter fiscal 2021, Cisco, currently carrying a Zacks Rank #3 (Hold), witnessed solid growth in data-center switching and strong demand for the Catalyst 9000 and Nexus 9000 family of switches. In the wireless vertical, the company gained from ramping up Wi-Fi 6 products and solid growth in Meraki solutions.

Notably, Catalyst and Nexus 9000 Series switches deliver high scalability, performance and energy in a compact form factor and are ideal for data-center aggregation and access-layer deployments across enterprise, service providers and cloud networks.

It is quite encouraging to see that Cisco’s Application Centric Infrastructure (ACI) networking technology is gaining significant traction from customers.

The Zacks Consensus Estimate for the company’s fiscal 2021 earnings has improved 1.3% to $3.22 per share over the past 60 days, indicating growth of 0.3% from the year-ago reported figure.

Cisco’s key competitor in the campus-switching market, Arista is poised to gain from the introduction of unified edge innovations across wired and wireless networks for its Cognitive Campus Edge portfolio for Enterprise Workspaces.

The introduction of network observability software, DANZ Monitoring Fabric, bettered enterprise-wide traffic visibility and contextual insights. The company also rolled out an enterprise-grade Software-as-a-Service offering for the flagship CloudVision platform.

The company, currently carrying a Zacks Rank #3, continues to expand its cognitive campus portfolio with the new platform including the 750 Series modular chassis and the 720 Series 96 port fixed switch.

Also, it launched the 720XP Series of fixed Power over Ethernet (PoE) leaf switches with 60W PoE, enabling it to offer a complete end-to-end solution for cognitive campus Ethernet as well as the introduction of WiFi-6 wireless Access Points (APs).

The Zacks Consensus Estimate for the company’s 2021 earnings has been raised by 2 cents in the past seven days to $10.08 per share, implying growth of 11.5% from the year-earlier reported figure.

NETGEAR is expected to benefit from robust networking solutions. It maintains a competitive edge with product launches, based on Wi-Fi 6 standards, and aims to leverage the latest technological innovation to accelerate growth.

Notably, the company, currently carrying a Zacks Rank #2 (Buy), continues to introduce products and services that hinge on affordability, reliability and ease of use. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In order to capitalize on the increasing demand for cloud-based applications pertaining to small and medium-sized enterprises, NETGEAR is introducing next-generation commercial products.

The new offerings include Power over Ethernet (PoE) switches, Multi-gigabit Ethernet switches, high capacity local and remote unified storage, small-to-medium capacity campus wireless local area network (LAN) and security appliances. These products are likely to augment the effectiveness and efficiency of its hybrid cloud access network and reinforce its position in the market.

The Zacks Consensus Estimate for the company’s current-year earnings has been lifted 5.5% to $3.25 per share over the past 60 days, indicating growth of 12.9% from the prior-year reported figure.

Juniper is well poised for cashing in on the expected rise in spending across carriers to upgrade their networks and support the incremental growth rate in data traffic as economies reopen.

Increased spending from AT&T and Verizon, Juniper’s top customers, are expected to bolster revenues. We believe Juniper's new products will be able to meet the escalating needs and therefore find easy acceptance among customers.

Juniper’s strength in its comprehensive secure, AI-driven campus solution spans across both wired and wireless domains, from access to core and aggregation to the network edge, holds promise.

Moreover, the company, currently carrying a Zacks Rank #3, is seeing encouraging trends across various areas of its business including solid momentum in Mist Systems.

Also, a sturdy portfolio of cloud-grade EX Switches augurs well. These switches are designed for the converged enterprise branch, campus and data center, and help customers address demands for high availability, unified communications and virtualization.

The Zacks Consensus Estimate for the company’s 2021 earnings has been revised a penny upward to $1.64 per share over the past 60 days, indicating growth of 5.8% from the year-ago reported figure.

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