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Piper Ups to Buy; Is 2012 the Growth Year?

Shares of Juniper Networks (JNPR) are up 35 cents, or 1.6%, at $21.88 this morning despite the company having last night cuts its Q4 outlook, citing slowing spending for routers among telecommunications customers.

The stock received one upgrade today, frim Piper Jaffray, and one downgrade, from Merrill Lynch.

Piper’s Teoy Jensen raised his rating to Outperform from Neutral, and raised his price target to $25 from $22, arguing the worst is behind the company.

“With 2011 now in the rear-view mirror, we believe 2012 will be a significantly better year for Juniper and the company’s stock performance,” writes Jensen.

“Juniper is in the early stages of several important product cycles (MobileNext, QFabric, T4000 and PTX), is facing very easy year/year comps that should set the stage for accelerating revenue growth and we believe the stock is attractively valued trading at the lower end of the company’s historical range.”

Sandeep Shyamsuka with Auriga Securities urges investors to stay the course, reiterating a Buy rating and a $26 target price. Growth will resume, he avers.

“The reduced guidance is not completely surprising to investors amidst broadly weaker service provider spending, particularly in North America.”

“We expect carrier spending to resume in 2Q12,” he writes, and “We view Juniper as well positioned to benefit from an expected uptick in router spending at servant content providers.”

However, Shyamsuka cut his 2012 estimate to $4.73 billion in revenue and $1.30 in EPS from a prior $5.13 billion and $1.60.

Joanna Makris with Mizuho Securities this morning reiterated a Neutral rating on Juniper, writing that “2012 can only get (slightly) better…”

“After four consecutive quarters of lowering EPS estimates, coupled with reduced guidance and healthy backlog heading into 4Q, we believe Juniper can begin to meet expectations,” she added.

Ticonderoga Securities’ Brian White reiterates a Neutral rating. When will Juniper bottom out, after a 45% decline last year, he asks.

“Juniper is ramping exciting new products in 2012 and when service provider spending turns the corner, the stock could prove interesting for longer-term investors.”

That said, he urges investors instead buy Cisco Systems (CSCO) and F5 Networks (FFIV), as they are more exposed to enterprise spending, less dependent on telcos.
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