Juniper Networks’ Price Target From BMO Lifted to $30 From $29

Juniper Networks (JNPR) received a slight increase to its price target late Tuesday from BMO Capital Markets after the networking-technology company reported Q1 adjusted earnings per share and revenue above analysts’ expectations while forecasting Q2 results near the Street’s consensus estimates.

The new price target from BMO is $30 per share, up from $29. This moves the target further above the stock’s Tuesday closing price of $24.74 as well as its recent Wednesday pre-market trading level of $26.20. BMO kept its investment rating on the stock at outperform.

In a note to clients, BMO described Juniper’s Q1 results as “solid,” noting its sales, margins, and earnings per share all topped the firm’s expectations. It highlighted that enterprise customer demand “was particularly strong,” adding “while the cloud vertical still faces challenges, we were pleased to see solid momentum in the product transition that has been weighing on results.”

BMO said it now expects routing average selling prices to normalize and sees ramping deployments helping drive a return to cloud-routing growth in fiscal 2019. It added that guidance of year-over-year growth in both switching and security “is encouraging.”

After Tuesday’s market close, Juniper reported Q1 adjusted earnings per share of $0.28, down from $0.46 a year earlier but surpassing analysts’ mean estimate according to Capital IQ of $0.25. Total net revenue slipped to $1.08 billion from $1.22 billion a year earlier but topped analysts’ mean estimate of $1.05 billion. Gross margin was 57.1%, down from the year-earlier period’s 61.1% and missing analysts’ mean estimate of 58.3%.

For the quarter ending in June, the company forecast adjusted EPS of $0.41 to $0.47 and revenue of $1.15 billion to $1.21 billion with gross margin between 58% and 60%. Analysts’ mean estimates had been at $0.43, $1.16 billion and 59.0%, respectively. The Street view for adjusted EPS remains at $0.43 while analysts’ mean estimate for Q2 revenue rose to $1.18 billion and their mean estimate for gross margin edged up to 59.1%.

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