Juniper Networks Faces 'Ongoing' Business Pressures, Credit Suisse Says

Juniper Networks Inc JNPR could face a number of challenges from headwinds that come due to changes in its product portfolio, according to Credit Suisse.

The Analyst

Sami Badri of Credit Suisse on Thursday initiated coverage on Juniper with an Underperform rating and $21 price target.

The Thesis

The competitive and technological pressures on Juniper are only intensifying, Badri said in a note.

Juniper faces increasing pressure from competitive peers Cisco Systems, Inc. CSCO and Arista Networks Inc ANET, said Badri.

The increased adoption of white box appliances by key customers is further challenging the company’s market share, the analyst said.

“Given these factors, we believe JNPR will be subject to ongoing and further business pressures through FY18/19."

While the company is transitioning its mix to services, it is converting revenues slower than its peer F5 Networks Inc FFIV, Badri said.

“We identify this as a key area of focus for networking equipment companies, as the reliability on telecom spending has faded, and highly recurring, predictable and profitable services revenues are in demand to stabilize revenue streams.”