By Senad Karaahmetovic
Shares of Juniper Networks (NYSE:JNPR) are trading 2.4% lower in premarket Wednesday after the communications equipment manufacturer reported weaker-than-expected Q4 results.
Juniper Networks reported an in-line Q4 EPS while revenue came in at $1.45 billion, missing the $1.48B consensus. Revenue increased by 11%, driven by the 13% jump in product revenue.
For this quarter, the company expects to post an adjusted EPS of $0.42 (up or down 5 cents) on revenue of $1.34B (up or down $50 million). Analysts were looking for an EPS of $0.40 on revenue of $1.30B.
“We are still experiencing supply chain related headwinds associated with shortages as well as elevated component and freight costs, which are expected to continue through the course of 2023,” the company stated.
Bank of America analysts said the Q4 results show that “underlying trends may be weakening.” As such, they reiterated an Underweight rating on JNPR stock and a $29 per share price target, which implies a downside risk of about 10% relative to yesterday’s closing price.
“The focal points of the quarter were accelerated backlog drawdown and management’s normalized backlog target, as well as weakness in the Service Provider (SP) vertical, suggesting FY23 may be on target but it is mainly a function of historical orders,” the analysts wrote.
On the other hand, Citi analysts hiked the price target on Juniper to $35 per share from the prior $30 as the Q4 results showed the company is gaining market share from Cisco (NASDAQ:CSCO). They said the fact that Juniper hiked its dividend in a difficult macro environment is “impressive.”
“Juniper’s results and outlook show the company is gaining share, as the company posted +12% Y/Y growth in the December quarter and full year 2022. Importantly, this was not off of easy comps,” the analysts added.