I can’t speak for analysts, but here are my
impressions:
Juniper's earnings were actually decent; beat on the
bottom line. However, the guidance was soft, which
considering the global climate, is unfortunate but not really
surprising. Most company’s in the S&P are guiding
lower. All of the Networking companies sell plenty of gear
around the globe, so they are not immune to this slow down.
It did bother me, however, to see that JNPR’s CFO is
leaving, it tells me that she may have failed to set proper
expectations with the street. Remember that it is the company
that massages and sets guidance, analysts to follow.
Guidance:
Q1 fiscal 2016 adjusted EPS of $0.42-$0.46 per share,
revenue about $1.17 billion.
Estimates:
Q1 fiscal 2016 adjusted EPS of$0.42-$0.49 per share,
revenue about $1.16B-$1.21B
The adjustment is towards the lower end of estimates,
which obviously the street is not happy with.
That said, JNPR's forward PE has now contracted to 9.68,
hardly expensive. I too checked the PEs of CSCO and CIEN, and
curiously they are 9.67 and 9.65 respectively.
Seems to me that investors are unduly punishing these
stocks, all of which are in bear market territory. They are
at a good price now, IMO.
The underlying positive trend of increasing bandwidth
demand driven by a world that will be completely interconnected has
not changed, and while it does not shield companies from turbulent
economic periods, it does IMO make them a buy. The key
however is picking those companies that stand to win.
Of the group, I prefer CSCO, INFN and
NOK.
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